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 6 out of 10. We evaluated SAP against 282 industry peers in the Software industry. While SAP has a great profitability rating, there are some minor concerns on its financial health. SAP is not valued too expensively and it also shows a decent 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.
Each year in the past 5 years SAP has been profitable.
In the past 5 years SAP always reported a positive cash flow from operatings.
1.2 Ratios
SAP has a Return On Assets of 7.58%. This is amongst the best in the industry. SAP outperforms 81.56% 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 79.79% of the companies in the same industry.
With an excellent Return On Invested Capital value of 11.00%, SAP belongs to the best of the industry, outperforming 87.59% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for SAP is below the industry average of 12.28%.
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
With an excellent Profit Margin value of 16.31%, SAP belongs to the best of the industry, outperforming 83.33% of the companies in the same industry.
SAP's Profit Margin has declined in the last couple of years.
The Operating Margin of SAP (25.82%) is better than 92.20% of its industry peers.
SAP's Operating Margin has been stable in the last couple of years.
SAP has a better Gross Margin (73.60%) than 62.41% of its industry peers.
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), SAP is creating some value.
Compared to 1 year ago, SAP has about the same amount of shares outstanding.
The number of shares outstanding for SAP has been reduced compared to 5 years ago.
Compared to 1 year ago, SAP has a worse debt to assets ratio.
2.2 Solvency
SAP has an Altman-Z score of 7.82. This indicates that SAP is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of SAP (7.82) is better than 78.37% 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 68.79% of the companies in the same industry.
A Debt/Equity ratio of 0.15 indicates that SAP is not too dependend on debt financing.
The Debt to Equity ratio of SAP (0.15) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.15 | ||
| Debt/FCF | 1.85 | ||
| Altman-Z | 7.82 |
ROIC/WACC1.4
WACC7.86%
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 doing worse than 65.96% of the companies in the same industry.
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.
With a Quick ratio value of 1.17, SAP is not doing good in the industry: 65.25% of the companies in the same industry are doing better.
| 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 -24.23% 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.
The Revenue has grown by 10.51% in the past year. This is quite good.
SAP shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.40% yearly.
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.
SAP is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 12.17% yearly.
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
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 49.37.
SAP's Price/Earnings ratio is a bit cheaper when compared to the industry. SAP is cheaper than 60.64% of the companies in the same industry.
SAP's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.51.
The Price/Forward Earnings ratio is 33.44, which means the current valuation is very expensive for SAP.
SAP's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. SAP is cheaper than 60.99% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 35.58. SAP is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 49.37 | ||
| Fwd PE | 33.44 |
4.2 Price Multiples
SAP's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. SAP is cheaper than 75.89% of the companies in the same industry.
60.64% of the companies in the same industry are more expensive than SAP, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 54.88 | ||
| EV/EBITDA | 28.43 |
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)1.24
PEG (5Y)N/A
EPS Next 2Y29.72%
EPS Next 3Y25.76%
5. Dividend
5.1 Amount
With a yearly dividend of 0.89%, 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 24.07. SAP pays more dividend than 92.91% of the companies in the same industry.
With a Dividend Yield of 0.89, SAP pays less dividend than the S&P500 average, which is at 2.35.
| 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.
SAP has paid a dividend for at least 10 years, which is a reliable track record.
SAP has decreased its dividend in the last 3 years.
Dividend Growth(5Y)7.95%
Div Incr Years2
Div Non Decr Years2
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%
300.64
-0.21 (-0.07%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners40.46%
Inst Owner Change0%
Ins Owners5.09%
Ins Owner ChangeN/A
Market Cap350.70B
Analysts77.95
Price Target332.48 (10.59%)
Short Float %0.14%
Short Ratio1.19
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.89% |
Yearly Dividend2.59
Dividend Growth(5Y)7.95%
DP44.75%
Div Incr Years2
Div Non Decr Years2
Ex-Date
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)1.37%
PT rev (3m)5.5%
EPS NQ rev (1m)-0.37%
EPS NQ rev (3m)-0.48%
EPS NY rev (1m)0%
EPS NY rev (3m)0.48%
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 | 49.37 | ||
| Fwd PE | 33.44 | ||
| P/S | 8.54 | ||
| P/FCF | 54.88 | ||
| P/OCF | 48.05 | ||
| P/B | 6.56 | ||
| P/tB | 23.25 | ||
| EV/EBITDA | 28.43 |
EPS(TTM)6.09
EY2.03%
EPS(NY)8.99
Fwd EY2.99%
FCF(TTM)5.48
FCFY1.82%
OCF(TTM)6.26
OCFY2.08%
SpS35.22
BVpS45.81
TBVpS12.93
PEG (NY)1.24
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 | 7.82 |
F-Score8
WACC7.86%
ROIC/WACC1.4
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%