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 283 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
In the past year SAP was profitable.
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
The Return On Assets of SAP (7.58%) is better than 81.63% of its industry peers.
SAP has a Return On Equity of 12.54%. This is in the better half of the industry: SAP outperforms 79.86% of its industry peers.
Looking at the Return On Invested Capital, with a value of 11.00%, SAP belongs to the top of the industry, outperforming 87.28% 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 12.70%.
The last Return On Invested Capital (11.00%) for SAP is above the 3 year average (8.58%), which is a sign of increasing profitability.
| 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
Looking at the Profit Margin, with a value of 16.31%, SAP belongs to the top of the industry, outperforming 81.27% of the companies in the same industry.
SAP's Profit Margin has declined in the last couple of years.
With an excellent Operating Margin value of 25.82%, SAP belongs to the best of the industry, outperforming 91.52% of the companies in the same industry.
SAP's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 73.60%, SAP is in the better half of the industry, outperforming 63.60% of the companies in the same industry.
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.
SAP has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for SAP has been reduced compared to 5 years ago.
SAP has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 8.00 indicates that SAP is not in any danger for bankruptcy at the moment.
The Altman-Z score of SAP (8.00) is better than 79.86% 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.
The Debt to FCF ratio of SAP (1.85) is better than 67.84% 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.
Looking at the Debt to Equity ratio, with a value of 0.15, SAP is in line with its industry, outperforming 49.12% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.15 | ||
| Debt/FCF | 1.85 | ||
| Altman-Z | 8 |
ROIC/WACC1.53
WACC7.21%
2.3 Liquidity
A Current Ratio of 1.17 indicates that SAP should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.17, SAP is doing worse than 65.72% 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 on the low side compared to the rest of the industry. SAP is outperformed by 65.37% 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.
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.
Looking at the last year, SAP shows a quite strong growth in Revenue. The Revenue has grown by 10.51% in the last year.
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.
SAP is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 12.01% yearly.
EPS Next Y39.67%
EPS Next 2Y29.72%
EPS Next 3Y25.76%
EPS Next 5Y21.09%
Revenue Next Year10.84%
Revenue Next 2Y11.3%
Revenue Next 3Y11.91%
Revenue Next 5Y12.01%
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 51.28, which means the current valuation is very expensive for SAP.
SAP's Price/Earnings ratio is in line with the industry average.
SAP's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 25.82.
A Price/Forward Earnings ratio of 33.90 indicates a quite expensive valuation of SAP.
The rest of the industry has a similar Price/Forward Earnings ratio as SAP.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.76, SAP is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 51.28 | ||
| Fwd PE | 33.9 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SAP is valued a bit cheaper than the industry average as 74.91% of the companies are valued more expensively.
The rest of the industry has a similar Price/Free Cash Flow ratio as SAP.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 55.64 | ||
| EV/EBITDA | 29.33 |
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 25.76% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.29
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 14.37, SAP pays a better dividend. On top of this SAP pays more dividend than 92.58% of the companies listed in the same industry.
With a Dividend Yield of 0.89, SAP pays less dividend than the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.89% |
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
44.75% of the earnings are spent on dividend by SAP. This is a bit on the high side, but may be sustainable.
The dividend of SAP is growing, but earnings are growing more, so the dividend growth is sustainable.
DP44.75%
EPS Next 2Y29.72%
EPS Next 3Y25.76%
294.87
-4.97 (-1.66%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners40.22%
Inst Owner Change5.46%
Ins Owners8.1%
Ins Owner ChangeN/A
Market Cap343.97B
Analysts78.42
Price Target316.96 (7.49%)
Short Float %0.2%
Short Ratio1.31
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.89% |
Yearly Dividend2.48
Dividend Growth(5Y)7.95%
DP44.75%
Div Incr Years1
Div Non Decr Years1
Ex-Date
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)0.58%
PT rev (3m)16.64%
EPS NQ rev (1m)-0.37%
EPS NQ rev (3m)-1.61%
EPS NY rev (1m)0.94%
EPS NY rev (3m)2.92%
Revenue NQ rev (1m)-2.32%
Revenue NQ rev (3m)-2.44%
Revenue NY rev (1m)-2%
Revenue NY rev (3m)-0.67%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 51.28 | ||
| Fwd PE | 33.9 | ||
| P/S | 8.65 | ||
| P/FCF | 55.64 | ||
| P/OCF | 48.71 | ||
| P/B | 6.65 | ||
| P/tB | 23.57 | ||
| EV/EBITDA | 29.33 |
EPS(TTM)5.75
EY1.95%
EPS(NY)8.7
Fwd EY2.95%
FCF(TTM)5.3
FCFY1.8%
OCF(TTM)6.05
OCFY2.05%
SpS34.08
BVpS44.32
TBVpS12.51
PEG (NY)1.29
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 | 8 |
F-Score8
WACC7.21%
ROIC/WACC1.53
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 Year10.84%
Revenue Next 2Y11.3%
Revenue Next 3Y11.91%
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%