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 95 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 valied quite expensively at the moment, while 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.
In the past 5 years SAP has always been profitable.
SAP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 7.58%, SAP is in the better half of the industry, outperforming 76.84% of the companies in the same industry.
Looking at the Return On Equity, with a value of 12.54%, SAP is in the better half of the industry, outperforming 70.53% of the companies in the same industry.
The Return On Invested Capital of SAP (11.00%) is better than 82.11% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for SAP is below the industry average of 11.01%.
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 Profit Margin of 16.31%. This is in the better half of the industry: SAP outperforms 75.79% of its industry peers.
SAP's Profit Margin has declined in the last couple of years.
SAP has a better Operating Margin (25.82%) than 87.37% 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 comparable to the rest of the industry.
SAP's Gross Margin has been stable in the last couple of years.
| 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so SAP is still creating some value.
The number of shares outstanding for SAP remains at a similar level compared to 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 7.77. This indicates that SAP is financially healthy and has little risk of bankruptcy at the moment.
SAP has a better Altman-Z score (7.77) than 81.05% 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.
SAP has a Debt to FCF ratio of 1.85. This is in the better half of the industry: SAP outperforms 68.42% of its industry peers.
SAP has a Debt/Equity ratio of 0.15. This is a healthy value indicating a solid balance between debt and equity.
SAP's Debt to Equity ratio of 0.15 is fine compared to the rest of the industry. SAP outperforms 68.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.15 | ||
| Debt/FCF | 1.85 | ||
| Altman-Z | 7.77 |
ROIC/WACC1.49
WACC7.36%
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.
SAP has a Current ratio (1.17) which is in line with its industry peers.
SAP has a Quick 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.
SAP has a Quick ratio of 1.17. This is comparable to the rest of the industry: SAP outperforms 46.32% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.17 | ||
| Quick Ratio | 1.17 |
3. Growth
3.1 Past
The earnings per share for SAP have decreased strongly by -25.96% in the last year.
SAP shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -2.38% yearly.
SAP shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.51%.
The Revenue has been growing slightly by 4.40% on average over the past years.
EPS 1Y (TTM)-25.96%
EPS 3Y-12.45%
EPS 5Y-2.38%
EPS Q2Q%63.25%
Revenue 1Y (TTM)10.51%
Revenue growth 3Y7.07%
Revenue growth 5Y4.4%
Sales Q2Q%3.26%
3.2 Future
Based on estimates for the next years, SAP will show a very strong growth in Earnings Per Share. The EPS will grow by 21.09% on average per year.
The Revenue is expected to grow by 12.01% on average over the next years. This is quite good.
EPS Next Y39.67%
EPS Next 2Y29.72%
EPS Next 3Y25.76%
EPS Next 5Y21.09%
Revenue Next Year11.64%
Revenue Next 2Y11.8%
Revenue Next 3Y12.29%
Revenue Next 5Y12.01%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
SAP is valuated quite expensively with a Price/Earnings ratio of 52.84.
Compared to the rest of the industry, the Price/Earnings ratio of SAP is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 28.22. SAP is valued rather expensively when compared to this.
Based on the Price/Forward Earnings ratio of 34.93, the valuation of SAP can be described as expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of SAP is on the same level as its industry peers.
SAP's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 20.86.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 52.84 | ||
| Fwd PE | 34.93 |
4.2 Price Multiples
SAP's Enterprise Value to EBITDA is on the same level as the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as SAP.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 56.83 | ||
| EV/EBITDA | 28.22 |
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.
A more expensive valuation may be justified as SAP's earnings are expected to grow with 25.76% in the coming years.
PEG (NY)1.33
PEG (5Y)N/A
EPS Next 2Y29.72%
EPS Next 3Y25.76%
5. Dividend
5.1 Amount
With a yearly dividend of 0.97%, SAP is not a good candidate for dividend investing.
SAP's Dividend Yield is rather good when compared to the industry average which is at 1.86. SAP pays more dividend than 84.21% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.44, SAP's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.97% |
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 Years4
Div Non Decr Years5
5.3 Sustainability
44.75% of the earnings are spent on dividend by SAP. 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 (5/2/2025, 7:00:00 PM)
266.3
+11 (+4.31%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners40.22%
Inst Owner ChangeN/A
Ins Owners8.1%
Ins Owner ChangeN/A
Market Cap310.64B
Analysts78.42
Price Target283.71 (6.54%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.97% |
Yearly Dividend2.2
Dividend Growth(5Y)7.95%
DP44.75%
Div Incr Years4
Div Non Decr Years5
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.37%
Min EPS beat(2)-1.57%
Max EPS beat(2)0.84%
EPS beat(4)2
Avg EPS beat(4)0.22%
Min EPS beat(4)-1.57%
Max EPS beat(4)1.86%
EPS beat(8)4
Avg EPS beat(8)16.53%
EPS beat(12)5
Avg EPS beat(12)7.69%
EPS beat(16)8
Avg EPS beat(16)11.12%
Revenue beat(2)1
Avg Revenue beat(2)-3.86%
Min Revenue beat(2)-9.45%
Max Revenue beat(2)1.74%
Revenue beat(4)1
Avg Revenue beat(4)-2.18%
Min Revenue beat(4)-9.45%
Max Revenue beat(4)1.74%
Revenue beat(8)2
Avg Revenue beat(8)-1.52%
Revenue beat(12)3
Avg Revenue beat(12)-1.94%
Revenue beat(16)5
Avg Revenue beat(16)-1.53%
PT rev (1m)0.78%
PT rev (3m)17.02%
EPS NQ rev (1m)-1.19%
EPS NQ rev (3m)-1.17%
EPS NY rev (1m)-0.46%
EPS NY rev (3m)2.09%
Revenue NQ rev (1m)-0.21%
Revenue NQ rev (3m)0.95%
Revenue NY rev (1m)-1.29%
Revenue NY rev (3m)0.04%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 52.84 | ||
| Fwd PE | 34.93 | ||
| P/S | 8.84 | ||
| P/FCF | 56.83 | ||
| P/OCF | 49.75 | ||
| P/B | 6.8 | ||
| P/tB | 24.08 | ||
| EV/EBITDA | 28.22 |
EPS(TTM)5.04
EY1.89%
EPS(NY)7.62
Fwd EY2.86%
FCF(TTM)4.69
FCFY1.76%
OCF(TTM)5.35
OCFY2.01%
SpS30.13
BVpS39.19
TBVpS11.06
PEG (NY)1.33
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 | 7.77 |
F-Score8
WACC7.36%
ROIC/WACC1.49
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)-25.96%
EPS 3Y-12.45%
EPS 5Y-2.38%
EPS Q2Q%63.25%
EPS Next Y39.67%
EPS Next 2Y29.72%
EPS Next 3Y25.76%
EPS Next 5Y21.09%
Revenue 1Y (TTM)10.51%
Revenue growth 3Y7.07%
Revenue growth 5Y4.4%
Sales Q2Q%3.26%
Revenue Next Year11.64%
Revenue Next 2Y11.8%
Revenue Next 3Y12.29%
Revenue Next 5Y12.01%
EBIT growth 1Y34.96%
EBIT growth 3Y15.02%
EBIT growth 5Y5.49%
EBIT Next Year57.14%
EBIT Next 3Y28.55%
EBIT Next 5Y20.72%
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%