SAP SE (SAP.DE) Stock Fundamental Analysis
FRA:SAP - Deutsche Boerse Ag - DE0007164600 - Common Stock - Currency: EUR
Overall SAP gets a fundamental rating of 6 out of 10. We evaluated SAP against 99 industry peers in the Software industry. SAP scores excellent on profitability, but there are some minor concerns on its financial health. SAP has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
SAP had positive earnings in the past year.
In the past year SAP had a positive cash flow from operations.
SAP had positive earnings in each of the past 5 years.
In the past 5 years SAP always reported a positive cash flow from operatings.
1.2 Ratios
SAP has a better Return On Assets (7.58%) than 79.81% of its industry peers.
Looking at the Return On Equity, with a value of 12.54%, SAP is in the better half of the industry, outperforming 73.08% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 11.00%, SAP belongs to the top of the industry, outperforming 81.73% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for SAP is below the industry average of 10.83%.
The 3 year average ROIC (8.58%) for SAP is below the current ROIC(11.00%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.58% | ||
| ROE | 12.54% | ||
| ROIC | 11% |
ROA(3y)5.45%
ROA(5y)6.51%
ROE(3y)8.93%
ROE(5y)11.53%
ROIC(3y)8.58%
ROIC(5y)8.51%
1.3 Margins
SAP has a better Profit Margin (16.31%) than 77.88% of its industry peers.
In the last couple of years the Profit Margin of SAP has declined.
SAP's Operating Margin of 25.82% is amongst the best of the industry. SAP outperforms 89.42% of its industry peers.
SAP's Operating Margin has been stable in the last couple of years.
SAP has a Gross Margin (73.60%) which is in line with 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 | 25.82% | ||
| PM (TTM) | 16.31% | ||
| GM | 73.6% |
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
SAP has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, SAP has about the same amount of shares outstanding.
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 7.85. This indicates that SAP is financially healthy and has little risk of bankruptcy at the moment.
SAP has a better Altman-Z score (7.85) than 77.88% of its industry peers.
The Debt to FCF ratio of SAP is 1.85, which is an excellent value as it means it would take SAP, only 1.85 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 1.85, SAP is doing good in the industry, outperforming 72.12% of the companies in the same industry.
SAP has a Debt/Equity ratio of 0.15. This is a healthy value indicating a solid balance between debt and equity.
SAP has a Debt to Equity ratio of 0.15. This is in the better half of the industry: SAP outperforms 72.12% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.15 | ||
| Debt/FCF | 1.85 | ||
| Altman-Z | 7.85 |
ROIC/WACC1.42
WACC7.74%
2.3 Liquidity
SAP has a Current Ratio of 1.17. 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 1.17, SAP is in line with its industry, outperforming 46.15% of the companies in the same industry.
A Quick Ratio of 1.17 indicates that SAP should not have too much problems paying its short term obligations.
SAP's Quick ratio of 1.17 is in line compared to the rest of the industry. SAP outperforms 49.04% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.17 | ||
| Quick Ratio | 1.17 |
3. Growth
3.1 Past
SAP shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -24.23%.
Measured over the past years, SAP shows a decrease in Earnings Per Share. The EPS has been decreasing by -2.38% on average per year.
The Revenue has grown by 10.51% in the past year. This is quite good.
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)-24.23%
EPS 3Y-12.45%
EPS 5Y-2.38%
EPS Q2Q%77.78%
Revenue 1Y (TTM)10.51%
Revenue growth 3Y7.07%
Revenue growth 5Y4.4%
Sales Q2Q%12.09%
3.2 Future
SAP is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 20.23% yearly.
Based on estimates for the next years, SAP will show a quite strong growth in Revenue. The Revenue will grow by 12.17% on average per year.
EPS Next Y39.67%
EPS Next 2Y29.72%
EPS Next 3Y25.76%
EPS Next 5Y20.23%
Revenue Next Year10.84%
Revenue Next 2Y11.3%
Revenue Next 3Y11.91%
Revenue Next 5Y12.17%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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
The Price/Earnings ratio is 50.15, which means the current valuation is very expensive for SAP.
Compared to the rest of the industry, the Price/Earnings ratio of SAP indicates a somewhat cheap valuation: SAP is cheaper than 60.58% of the companies listed in the same industry.
SAP's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.41.
The Price/Forward Earnings ratio is 33.94, which means the current valuation is very expensive for SAP.
Compared to the rest of the industry, the Price/Forward Earnings ratio of SAP is on the same level as its industry peers.
SAP is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 35.19, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 50.15 | ||
| Fwd PE | 33.94 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as SAP.
Based on the Price/Free Cash Flow ratio, SAP is valued a bit cheaper than 60.58% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 55.22 | ||
| EV/EBITDA | 28.61 |
4.3 Compensation for Growth
SAP's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of SAP may justify a higher PE ratio.
A more expensive valuation may be justified as SAP's earnings are expected to grow with 25.76% in the coming years.
PEG (NY)1.26
PEG (5Y)N/A
EPS Next 2Y29.72%
EPS Next 3Y25.76%
5. Dividend
5.1 Amount
SAP has a yearly dividend return of 0.89%, which is pretty low.
Compared to an average industry Dividend Yield of 2.06, SAP pays a better dividend. On top of this SAP pays more dividend than 83.65% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.35, SAP's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.89% |
5.2 History
On average, the dividend of SAP grows each year by 7.95%, which is quite nice.
Dividend Growth(5Y)7.95%
Div Incr Years1
Div Non Decr Years6
5.3 Sustainability
SAP pays out 44.75% of its income as dividend. This is a bit on the high side, but may be sustainable.
SAP's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP44.75%
EPS Next 2Y29.72%
EPS Next 3Y25.76%
FRA:SAP (7/11/2025, 7:00:00 PM)
258.75
-4.35 (-1.65%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners40.46%
Inst Owner ChangeN/A
Ins Owners5.09%
Ins Owner ChangeN/A
Market Cap301.83B
Analysts77.95
Price Target290.19 (12.15%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.89% |
Yearly Dividend2.2
Dividend Growth(5Y)7.95%
DP44.75%
Div Incr Years1
Div Non Decr Years6
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)4.12%
Min EPS beat(2)-1.57%
Max EPS beat(2)9.81%
EPS beat(4)2
Avg EPS beat(4)2.47%
Min EPS beat(4)-1.57%
Max EPS beat(4)9.81%
EPS beat(8)4
Avg EPS beat(8)17.66%
EPS beat(12)5
Avg EPS beat(12)8.44%
EPS beat(16)8
Avg EPS beat(16)11.68%
Revenue beat(2)1
Avg Revenue beat(2)0.02%
Min Revenue beat(2)-1.7%
Max Revenue beat(2)1.74%
Revenue beat(4)1
Avg Revenue beat(4)-0.25%
Min Revenue beat(4)-1.7%
Max Revenue beat(4)1.74%
Revenue beat(8)2
Avg Revenue beat(8)-0.55%
Revenue beat(12)3
Avg Revenue beat(12)-1.29%
Revenue beat(16)5
Avg Revenue beat(16)-1.05%
PT rev (1m)0.77%
PT rev (3m)1.14%
EPS NQ rev (1m)-0.37%
EPS NQ rev (3m)-1.41%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.46%
Revenue NQ rev (1m)0.01%
Revenue NQ rev (3m)-2.4%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-2%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 50.15 | ||
| Fwd PE | 33.94 | ||
| P/S | 8.59 | ||
| P/FCF | 55.22 | ||
| P/OCF | 48.34 | ||
| P/B | 6.6 | ||
| P/tB | 23.39 | ||
| EV/EBITDA | 28.61 |
EPS(TTM)5.16
EY1.99%
EPS(NY)7.62
Fwd EY2.95%
FCF(TTM)4.69
FCFY1.81%
OCF(TTM)5.35
OCFY2.07%
SpS30.13
BVpS39.19
TBVpS11.06
PEG (NY)1.26
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.58% | ||
| ROE | 12.54% | ||
| ROCE | 16.48% | ||
| ROIC | 11% | ||
| ROICexc | 14.39% | ||
| ROICexgc | 65.26% | ||
| OM | 25.82% | ||
| PM (TTM) | 16.31% | ||
| GM | 73.6% | ||
| FCFM | 15.55% |
ROA(3y)5.45%
ROA(5y)6.51%
ROE(3y)8.93%
ROE(5y)11.53%
ROIC(3y)8.58%
ROIC(5y)8.51%
ROICexc(3y)10.69%
ROICexc(5y)10.46%
ROICexgc(3y)47.04%
ROICexgc(5y)47.34%
ROCE(3y)12.97%
ROCE(5y)12.91%
ROICexcg growth 3Y10.63%
ROICexcg growth 5Y-0.71%
ROICexc growth 3Y15.06%
ROICexc growth 5Y4.05%
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-Score8
Asset Turnover0.46
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.15 | ||
| Debt/FCF | 1.85 | ||
| Debt/EBITDA | 0.64 | ||
| Cap/Depr | 59.12% | ||
| Cap/Sales | 2.21% | ||
| Interest Coverage | 16.04 | ||
| Cash Conversion | 60.08% | ||
| Profit Quality | 95.36% | ||
| Current Ratio | 1.17 | ||
| Quick Ratio | 1.17 | ||
| Altman-Z | 7.85 |
F-Score8
WACC7.74%
ROIC/WACC1.42
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)-24.23%
EPS 3Y-12.45%
EPS 5Y-2.38%
EPS Q2Q%77.78%
EPS Next Y39.67%
EPS Next 2Y29.72%
EPS Next 3Y25.76%
EPS Next 5Y20.23%
Revenue 1Y (TTM)10.51%
Revenue growth 3Y7.07%
Revenue growth 5Y4.4%
Sales Q2Q%12.09%
Revenue Next Year10.84%
Revenue Next 2Y11.3%
Revenue Next 3Y11.91%
Revenue Next 5Y12.17%
EBIT growth 1Y34.96%
EBIT growth 3Y15.02%
EBIT growth 5Y5.49%
EBIT Next Year58.56%
EBIT Next 3Y28.56%
EBIT Next 5Y20.54%
FCF growth 1Y18.39%
FCF growth 3Y-6.56%
FCF growth 5Y10.55%
OCF growth 1Y12.79%
OCF growth 3Y-5.69%
OCF growth 5Y8.35%