SAP SE-SPONSORED ADR (SAP) Stock Fundamental Analysis
USA - NYSE:SAP - US8030542042 - ADR
268.85 USD
+3.58 (+1.35%)
268.49 USD
-0.36 (-0.13%)
We assign a fundamental rating of 7 out of 10 to SAP. SAP was compared to 279 industry peers in the Software industry. SAP has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. SAP is not valued too expensively and it also shows a decent growth rate. These ratings could make SAP a good candidate for quality investing.
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.
Each year in the past 5 years SAP had a positive operating cash flow.
1.2 Ratios
SAP has a better Return On Assets (9.56%) than 84.95% of its industry peers.
With an excellent Return On Equity value of 15.95%, SAP belongs to the best of the industry, outperforming 83.15% of the companies in the same industry.
SAP's Return On Invested Capital of 13.00% is amongst the best of the industry. SAP outperforms 89.96% of its industry peers.
SAP had an Average Return On Invested Capital over the past 3 years of 8.58%. This is below the industry average of 11.86%.
The last Return On Invested Capital (13.00%) for SAP is above the 3 year average (8.58%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.56% | ||
| ROE | 15.95% | ||
| ROIC | 13% |
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
The Profit Margin of SAP (18.23%) is better than 82.08% of its industry peers.
SAP's Profit Margin has declined in the last couple of years.
SAP has a better Operating Margin (27.04%) than 90.32% of its industry peers.
SAP's Operating Margin has been stable in the last couple of years.
SAP's Gross Margin of 73.80% is fine compared to the rest of the industry. SAP outperforms 62.01% of its industry peers.
SAP's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27.04% | ||
| PM (TTM) | 18.23% | ||
| GM | 73.8% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), SAP is creating some value.
The number of shares outstanding for SAP remains at a similar level compared to 1 year ago.
Compared to 5 years ago, SAP has less shares outstanding
SAP has a worse debt/assets ratio than last year.
2.2 Solvency
SAP has an Altman-Z score of 7.61. This indicates that SAP is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 7.61, SAP is in the better half of the industry, outperforming 78.85% of the companies in the same industry.
The Debt to FCF ratio of SAP is 1.35, which is an excellent value as it means it would take SAP, only 1.35 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.35, SAP is in the better half of the industry, outperforming 71.68% of the companies in the same industry.
A Debt/Equity ratio of 0.15 indicates that SAP is not too dependend on debt financing.
SAP has a Debt to Equity ratio (0.15) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.15 | ||
| Debt/FCF | 1.35 | ||
| Altman-Z | 7.61 |
ROIC/WACC1.64
WACC7.92%
2.3 Liquidity
A Current Ratio of 1.03 indicates that SAP should not have too much problems paying its short term obligations.
SAP has a worse Current ratio (1.03) than 70.97% of its industry peers.
A Quick Ratio of 1.03 indicates that SAP should not have too much problems paying its short term obligations.
SAP has a worse Quick ratio (1.03) than 70.25% of its industry peers.
SAP does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.03 | ||
| Quick Ratio | 1.03 |
3. Growth
3.1 Past
SAP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 16.56%, which is quite good.
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 10.29% in the last year.
SAP shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.40% yearly.
EPS 1Y (TTM)16.56%
EPS 3Y-12.45%
EPS 5Y-2.38%
EPS Q2Q%36.36%
Revenue 1Y (TTM)10.29%
Revenue growth 3Y7.07%
Revenue growth 5Y4.4%
Sales Q2Q%8.92%
3.2 Future
The Earnings Per Share is expected to grow by 21.07% on average over the next years. This is a very strong growth
Based on estimates for the next years, SAP will show a quite strong growth in Revenue. The Revenue will grow by 12.62% on average per year.
EPS Next Y34.89%
EPS Next 2Y26.83%
EPS Next 3Y24.42%
EPS Next 5Y21.07%
Revenue Next Year9.81%
Revenue Next 2Y10.6%
Revenue Next 3Y11.45%
Revenue Next 5Y12.62%
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 41.11, which means the current valuation is very expensive for SAP.
60.22% of the companies in the same industry are more expensive than SAP, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of SAP to the average of the S&P500 Index (27.29), we can say SAP is valued expensively.
A Price/Forward Earnings ratio of 31.37 indicates a quite expensive valuation of SAP.
Compared to the rest of the industry, the Price/Forward Earnings ratio of SAP indicates a somewhat cheap valuation: SAP is cheaper than 60.57% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.80. SAP is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.11 | ||
| Fwd PE | 31.37 |
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 77.06% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, SAP is valued a bit cheaper than 65.95% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 40.76 | ||
| EV/EBITDA | 23.29 |
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 an outstanding 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 24.42% in the coming years.
PEG (NY)1.18
PEG (5Y)N/A
EPS Next 2Y26.83%
EPS Next 3Y24.42%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.02%, SAP has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 39.91, SAP pays a better dividend. On top of this SAP pays more dividend than 92.47% of the companies listed in the same industry.
With a Dividend Yield of 1.02, SAP pays less dividend than the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.02% |
5.2 History
On average, the dividend of SAP grows each year by 7.95%, which is quite nice.
SAP has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of SAP decreased in the last 3 years.
Dividend Growth(5Y)7.95%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
SAP pays out 41.94% 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.
DP41.94%
EPS Next 2Y26.83%
EPS Next 3Y24.42%
268.85
+3.58 (+1.35%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners40.46%
Inst Owner Change-2.87%
Ins Owners5.09%
Ins Owner ChangeN/A
Market Cap311.94B
Analysts78.38
Price Target346.16 (28.76%)
Short Float %0.21%
Short Ratio1.21
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.02% |
Yearly Dividend2.57
Dividend Growth(5Y)7.95%
DP41.94%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)5.72%
Min EPS beat(2)1.63%
Max EPS beat(2)9.81%
EPS beat(4)3
Avg EPS beat(4)2.93%
Min EPS beat(4)-1.57%
Max EPS beat(4)9.81%
EPS beat(8)4
Avg EPS beat(8)-2.96%
EPS beat(12)6
Avg EPS beat(12)9.64%
EPS beat(16)8
Avg EPS beat(16)8.76%
Revenue beat(2)0
Avg Revenue beat(2)-1.65%
Min Revenue beat(2)-1.7%
Max Revenue beat(2)-1.6%
Revenue beat(4)1
Avg Revenue beat(4)-0.54%
Min Revenue beat(4)-1.7%
Max Revenue beat(4)1.74%
Revenue beat(8)2
Avg Revenue beat(8)-0.56%
Revenue beat(12)3
Avg Revenue beat(12)-1.22%
Revenue beat(16)5
Avg Revenue beat(16)-1.09%
PT rev (1m)2.98%
PT rev (3m)4.12%
EPS NQ rev (1m)-0.02%
EPS NQ rev (3m)-10.28%
EPS NY rev (1m)0%
EPS NY rev (3m)-4.56%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-4.12%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)-0.92%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.11 | ||
| Fwd PE | 31.37 | ||
| P/S | 7.37 | ||
| P/FCF | 40.76 | ||
| P/OCF | 36.33 | ||
| P/B | 6.45 | ||
| P/tB | 26 | ||
| EV/EBITDA | 23.29 |
EPS(TTM)6.54
EY2.43%
EPS(NY)8.57
Fwd EY3.19%
FCF(TTM)6.6
FCFY2.45%
OCF(TTM)7.4
OCFY2.75%
SpS36.48
BVpS41.67
TBVpS10.34
PEG (NY)1.18
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.56% | ||
| ROE | 15.95% | ||
| ROCE | 19.67% | ||
| ROIC | 13% | ||
| ROICexc | 16.33% | ||
| ROICexgc | 73.27% | ||
| OM | 27.04% | ||
| PM (TTM) | 18.23% | ||
| GM | 73.8% | ||
| FCFM | 18.08% |
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 Turnover0.52
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.15 | ||
| Debt/FCF | 1.35 | ||
| Debt/EBITDA | 0.56 | ||
| Cap/Depr | 59.76% | ||
| Cap/Sales | 2.2% | ||
| Interest Coverage | 17.61 | ||
| Cash Conversion | 66.02% | ||
| Profit Quality | 99.22% | ||
| Current Ratio | 1.03 | ||
| Quick Ratio | 1.03 | ||
| Altman-Z | 7.61 |
F-Score8
WACC7.92%
ROIC/WACC1.64
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)16.56%
EPS 3Y-12.45%
EPS 5Y-2.38%
EPS Q2Q%36.36%
EPS Next Y34.89%
EPS Next 2Y26.83%
EPS Next 3Y24.42%
EPS Next 5Y21.07%
Revenue 1Y (TTM)10.29%
Revenue growth 3Y7.07%
Revenue growth 5Y4.4%
Sales Q2Q%8.92%
Revenue Next Year9.81%
Revenue Next 2Y10.6%
Revenue Next 3Y11.45%
Revenue Next 5Y12.62%
EBIT growth 1Y34.62%
EBIT growth 3Y15.02%
EBIT growth 5Y5.49%
EBIT Next Year58.56%
EBIT Next 3Y28.56%
EBIT Next 5Y21.41%
FCF growth 1Y22.34%
FCF growth 3Y-6.56%
FCF growth 5Y10.55%
OCF growth 1Y18.64%
OCF growth 3Y-5.69%
OCF growth 5Y8.35%