SAP SE-SPONSORED ADR (SAP) Stock Fundamental Analysis
NYSE:SAP - New York Stock Exchange, Inc. - US8030542042 - ADR - Currency: USD
Overall SAP gets a fundamental rating of 5 out of 10. We evaluated SAP against 284 industry peers in the Software industry. While SAP belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. SAP is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
SAP had positive earnings in the past year.
SAP had a positive operating cash flow in the past year.
SAP had positive earnings in each of the past 5 years.
Each year in the past 5 years SAP had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 4.21%, SAP is in the better half of the industry, outperforming 73.91% of the companies in the same industry.
SAP has a better Return On Equity (6.88%) than 72.83% of its industry peers.
SAP's Return On Invested Capital of 9.79% is amongst the best of the industry. SAP outperforms 85.51% of its industry peers.
The Average Return On Invested Capital over the past 3 years for SAP is below the industry average of 11.91%.
The 3 year average ROIC (8.61%) for SAP is below the current ROIC(9.79%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.21% | ||
| ROE | 6.88% | ||
| ROIC | 9.79% |
ROA(3y)5.45%
ROA(5y)6.51%
ROE(3y)8.93%
ROE(5y)11.53%
ROIC(3y)8.61%
ROIC(5y)8.53%
1.3 Margins
Looking at the Profit Margin, with a value of 9.14%, SAP is in the better half of the industry, outperforming 75.36% of the companies in the same industry.
In the last couple of years the Profit Margin of SAP has declined.
The Operating Margin of SAP (23.62%) is better than 90.94% of its industry peers.
In the last couple of years the Operating Margin of SAP has remained more or less at the same level.
SAP has a Gross Margin of 72.94%. This is in the better half of the industry: SAP outperforms 60.14% of its industry peers.
In the last couple of years the Gross Margin of SAP has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 23.62% | ||
| PM (TTM) | 9.14% | ||
| GM | 72.94% |
OM growth 3Y7.42%
OM growth 5Y1.05%
PM growth 3Y-21.47%
PM growth 5Y-5.38%
GM growth 3Y0.43%
GM growth 5Y0.66%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so SAP is still creating some value.
SAP has about the same amout of shares outstanding than it did 1 year ago.
SAP has less shares outstanding than it did 5 years ago.
The debt/assets ratio for SAP is higher compared to a year ago.
2.2 Solvency
SAP has an Altman-Z score of 8.36. This indicates that SAP is financially healthy and has little risk of bankruptcy at the moment.
SAP's Altman-Z score of 8.36 is fine compared to the rest of the industry. SAP outperforms 77.90% of its industry peers.
The Debt to FCF ratio of SAP is 2.59, which is a good value as it means it would take SAP, 2.59 years of fcf income to pay off all of its debts.
SAP has a Debt to FCF ratio of 2.59. This is in the better half of the industry: SAP outperforms 63.04% of its industry peers.
SAP has a Debt/Equity ratio of 0.16. This is a healthy value indicating a solid balance between debt and equity.
SAP has a Debt to Equity ratio (0.16) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.16 | ||
| Debt/FCF | 2.59 | ||
| Altman-Z | 8.36 |
ROIC/WACC1.46
WACC6.72%
2.3 Liquidity
SAP has a Current Ratio of 1.12. This is a normal value and indicates that SAP is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.12, SAP is doing worse than 70.65% of the companies in the same industry.
SAP has a Quick Ratio of 1.12. This is a normal value and indicates that SAP is financially healthy and should not expect problems in meeting its short term obligations.
SAP's Quick ratio of 1.12 is on the low side compared to the rest of the industry. SAP is outperformed by 69.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.12 | ||
| Quick Ratio | 1.12 |
3. Growth
3.1 Past
SAP shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -37.69%.
The Earnings Per Share has been decreasing by -2.38% on average over the past years.
Looking at the last year, SAP shows a quite strong growth in Revenue. The Revenue has grown by 9.51% in the last year.
Measured over the past years, SAP shows a small growth in Revenue. The Revenue has been growing by 4.40% on average per year.
EPS 1Y (TTM)-37.69%
EPS 3Y-12.45%
EPS 5Y-2.38%
EPS Q2Q%-1.42%
Revenue 1Y (TTM)9.51%
Revenue growth 3Y7.07%
Revenue growth 5Y4.4%
Sales Q2Q%10.73%
3.2 Future
The Earnings Per Share is expected to grow by 19.87% on average over the next years. This is quite good.
The Revenue is expected to grow by 11.55% on average over the next years. This is quite good.
EPS Next Y40.61%
EPS Next 2Y30.03%
EPS Next 3Y25.41%
EPS Next 5Y19.87%
Revenue Next Year13.01%
Revenue Next 2Y12.67%
Revenue Next 3Y12.8%
Revenue Next 5Y11.55%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
SAP is valuated quite expensively with a Price/Earnings ratio of 59.70.
SAP's Price/Earnings ratio is in line with the industry average.
SAP is valuated expensively when we compare the Price/Earnings ratio to 29.63, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 42.47, SAP can be considered very expensive at the moment.
SAP's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 22.68. SAP is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 59.7 | ||
| Fwd PE | 42.47 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SAP indicates a somewhat cheap valuation: SAP is cheaper than 74.28% of the companies listed in the same industry.
SAP's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 71.32 | ||
| EV/EBITDA | 33.58 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
SAP has a very decent profitability rating, which may justify a higher PE ratio.
SAP's earnings are expected to grow with 25.41% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.47
PEG (5Y)N/A
EPS Next 2Y30.03%
EPS Next 3Y25.41%
5. Dividend
5.1 Amount
SAP has a yearly dividend return of 0.85%, which is pretty low.
SAP's Dividend Yield is rather good when compared to the industry average which is at 12.83. SAP pays more dividend than 92.03% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.27, SAP's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.85% |
5.2 History
The dividend of SAP is nicely growing with an annual growth rate of 7.95%!
SAP has paid a dividend for at least 10 years, which is a reliable track record.
SAP has decreased its dividend recently.
Dividend Growth(5Y)7.95%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
82.11% of the earnings are spent on dividend by SAP. This is not a sustainable payout ratio.
The dividend of SAP is growing, but earnings are growing more, so the dividend growth is sustainable.
DP82.11%
EPS Next 2Y30.03%
EPS Next 3Y25.41%
282.99
-4.93 (-1.71%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners40.22%
Inst Owner Change-81.43%
Ins Owners8.1%
Ins Owner ChangeN/A
Market Cap330.11B
Analysts76.84
Price Target271.74 (-3.98%)
Short Float %0.22%
Short Ratio2.17
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.85% |
Yearly Dividend2.2
Dividend Growth(5Y)7.95%
DP82.11%
Div Incr Years1
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.14%
Min EPS beat(2)-1.57%
Max EPS beat(2)1.86%
EPS beat(4)1
Avg EPS beat(4)-7.04%
Min EPS beat(4)-28.22%
Max EPS beat(4)1.86%
EPS beat(8)4
Avg EPS beat(8)18.27%
EPS beat(12)4
Avg EPS beat(12)6.89%
EPS beat(16)8
Avg EPS beat(16)14.58%
Revenue beat(2)1
Avg Revenue beat(2)0.56%
Min Revenue beat(2)-0.61%
Max Revenue beat(2)1.74%
Revenue beat(4)1
Avg Revenue beat(4)0.01%
Min Revenue beat(4)-0.68%
Max Revenue beat(4)1.74%
Revenue beat(8)3
Avg Revenue beat(8)-0.3%
Revenue beat(12)3
Avg Revenue beat(12)-1.35%
Revenue beat(16)5
Avg Revenue beat(16)-0.96%
PT rev (1m)7.04%
PT rev (3m)13.79%
EPS NQ rev (1m)-0.29%
EPS NQ rev (3m)-0.59%
EPS NY rev (1m)1.73%
EPS NY rev (3m)1.73%
Revenue NQ rev (1m)1.39%
Revenue NQ rev (3m)2.01%
Revenue NY rev (1m)1.27%
Revenue NY rev (3m)1.79%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 59.7 | ||
| Fwd PE | 42.47 | ||
| P/S | 9.23 | ||
| P/FCF | 71.32 | ||
| P/OCF | 60.43 | ||
| P/B | 6.94 | ||
| P/tB | 27.22 | ||
| EV/EBITDA | 33.58 |
EPS(TTM)4.74
EY1.67%
EPS(NY)6.66
Fwd EY2.35%
FCF(TTM)3.97
FCFY1.4%
OCF(TTM)4.68
OCFY1.65%
SpS30.66
BVpS40.77
TBVpS10.4
PEG (NY)1.47
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.21% | ||
| ROE | 6.88% | ||
| ROCE | 14.66% | ||
| ROIC | 9.79% | ||
| ROICexc | 12.3% | ||
| ROICexgc | 54.14% | ||
| OM | 23.62% | ||
| PM (TTM) | 9.14% | ||
| GM | 72.94% | ||
| FCFM | 12.94% |
ROA(3y)5.45%
ROA(5y)6.51%
ROE(3y)8.93%
ROE(5y)11.53%
ROIC(3y)8.61%
ROIC(5y)8.53%
ROICexc(3y)10.74%
ROICexc(5y)10.49%
ROICexgc(3y)48.05%
ROICexgc(5y)47.94%
ROCE(3y)12.97%
ROCE(5y)12.91%
ROICexcg growth 3Y12.75%
ROICexcg growth 5Y0.43%
ROICexc growth 3Y15.56%
ROICexc growth 5Y4.33%
OM growth 3Y7.42%
OM growth 5Y1.05%
PM growth 3Y-21.47%
PM growth 5Y-5.38%
GM growth 3Y0.43%
GM growth 5Y0.66%
F-Score7
Asset Turnover0.46
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.16 | ||
| Debt/FCF | 2.59 | ||
| Debt/EBITDA | 0.77 | ||
| Cap/Depr | 62.27% | ||
| Cap/Sales | 2.33% | ||
| Interest Coverage | 14.67 | ||
| Cash Conversion | 55.82% | ||
| Profit Quality | 141.58% | ||
| Current Ratio | 1.12 | ||
| Quick Ratio | 1.12 | ||
| Altman-Z | 8.36 |
F-Score7
WACC6.72%
ROIC/WACC1.46
Cap/Depr(3y)55.18%
Cap/Depr(5y)51.03%
Cap/Sales(3y)2.6%
Cap/Sales(5y)2.73%
Profit Quality(3y)146.95%
Profit Quality(5y)133.59%
High Growth Momentum
Growth
EPS 1Y (TTM)-37.69%
EPS 3Y-12.45%
EPS 5Y-2.38%
EPS Q2Q%-1.42%
EPS Next Y40.61%
EPS Next 2Y30.03%
EPS Next 3Y25.41%
EPS Next 5Y19.87%
Revenue 1Y (TTM)9.51%
Revenue growth 3Y7.07%
Revenue growth 5Y4.4%
Sales Q2Q%10.73%
Revenue Next Year13.01%
Revenue Next 2Y12.67%
Revenue Next 3Y12.8%
Revenue Next 5Y11.55%
EBIT growth 1Y23.94%
EBIT growth 3Y15.02%
EBIT growth 5Y5.49%
EBIT Next Year54.89%
EBIT Next 3Y26.48%
EBIT Next 5Y21.67%
FCF growth 1Y-20.28%
FCF growth 3Y-6.56%
FCF growth 5Y10.55%
OCF growth 1Y-17.57%
OCF growth 3Y-5.69%
OCF growth 5Y8.35%