SAP SE-SPONSORED ADR (SAP) Stock Fundamental Analysis
NYSE:SAP - US8030542042 - ADR
270.94 USD
+4.74 (+1.78%)
272.29 USD
+1.35 (+0.5%)
Overall SAP gets a fundamental rating of 7 out of 10. We evaluated SAP against 280 industry peers in the Software industry. SAP scores excellent points on both the profitability and health parts. This is a solid base for a good stock. SAP has a correct valuation and a medium growth rate. This makes SAP very considerable for quality investing!
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.
SAP had positive earnings in each of the past 5 years.
SAP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 9.56%, SAP belongs to the best of the industry, outperforming 85.36% of the companies in the same industry.
SAP has a Return On Equity of 15.95%. This is amongst the best in the industry. SAP outperforms 82.50% of its industry peers.
SAP has a Return On Invested Capital of 13.00%. This is amongst the best in the industry. SAP outperforms 90.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for SAP is below the industry average of 12.00%.
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 81.79% of its industry peers.
In the last couple of years the Profit Margin of SAP has declined.
SAP has a Operating Margin of 27.04%. This is amongst the best in the industry. SAP outperforms 90.71% of its industry peers.
SAP's Operating Margin has been stable in the last couple of years.
SAP has a Gross Margin of 73.80%. This is in the better half of the industry: SAP outperforms 62.50% of 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 | 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
SAP has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is 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
An Altman-Z score of 7.80 indicates that SAP is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 7.80, SAP belongs to the best of the industry, outperforming 82.14% 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 71.43% 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 (0.15) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.15 | ||
| Debt/FCF | 1.35 | ||
| Altman-Z | 7.8 |
ROIC/WACC1.71
WACC7.58%
2.3 Liquidity
A Current Ratio of 1.03 indicates that SAP should not have too much problems paying its short term obligations.
SAP's Current ratio of 1.03 is on the low side compared to the rest of the industry. SAP is outperformed by 70.71% of its industry peers.
A Quick Ratio of 1.03 indicates that SAP should not have too much problems paying its short term obligations.
The Quick ratio of SAP (1.03) is worse than 70.00% of its industry peers.
The current and quick ratio evaluation for SAP is rather negative, while it does have 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
The Earnings Per Share has grown by an nice 16.56% over the past year.
The Earnings Per Share has been decreasing by -2.38% on average over the past years.
The Revenue has grown by 10.29% 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)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 21.04% on average over the next years. This is a very strong growth
SAP is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 12.42% yearly.
EPS Next Y34.89%
EPS Next 2Y26.83%
EPS Next 3Y24.42%
EPS Next 5Y21.04%
Revenue Next Year9.82%
Revenue Next 2Y10.6%
Revenue Next 3Y11.43%
Revenue Next 5Y12.42%
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
With a Price/Earnings ratio of 41.94, SAP can be considered very expensive at the moment.
SAP's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of SAP to the average of the S&P500 Index (26.84), we can say SAP is valued expensively.
The Price/Forward Earnings ratio is 32.00, which means the current valuation is very expensive for SAP.
Based on the Price/Forward Earnings ratio, SAP is valued a bit cheaper than 60.36% of the companies in the same industry.
SAP is valuated rather expensively when we compare the Price/Forward Earnings ratio to 22.48, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.94 | ||
| Fwd PE | 32 |
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 76.79% of the companies listed in the same industry.
65.00% 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 | 41.57 | ||
| EV/EBITDA | 24.09 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of SAP may justify a higher PE ratio.
SAP's earnings are expected to grow with 24.42% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.2
PEG (5Y)N/A
EPS Next 2Y26.83%
EPS Next 3Y24.42%
5. Dividend
5.1 Amount
SAP has a yearly dividend return of 0.99%, which is pretty low.
SAP's Dividend Yield is rather good when compared to the industry average which is at 57.16. SAP pays more dividend than 92.86% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.32, SAP's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.99% |
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.
The dividend of SAP is growing, but earnings are growing more, so the dividend growth is sustainable.
DP41.94%
EPS Next 2Y26.83%
EPS Next 3Y24.42%
270.94
+4.74 (+1.78%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners40.46%
Inst Owner Change-2.86%
Ins Owners5.09%
Ins Owner ChangeN/A
Market Cap314.37B
Analysts77.89
Price Target344.31 (27.08%)
Short Float %0.28%
Short Ratio1.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.99% |
Yearly Dividend2.56
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)2.15%
PT rev (3m)8.63%
EPS NQ rev (1m)-0.52%
EPS NQ rev (3m)-10.28%
EPS NY rev (1m)-3.43%
EPS NY rev (3m)-4.56%
Revenue NQ rev (1m)-0.01%
Revenue NQ rev (3m)-4.12%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)-0.91%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.94 | ||
| Fwd PE | 32 | ||
| P/S | 7.52 | ||
| P/FCF | 41.57 | ||
| P/OCF | 37.06 | ||
| P/B | 6.58 | ||
| P/tB | 26.52 | ||
| EV/EBITDA | 24.09 |
EPS(TTM)6.46
EY2.38%
EPS(NY)8.47
Fwd EY3.13%
FCF(TTM)6.52
FCFY2.41%
OCF(TTM)7.31
OCFY2.7%
SpS36.04
BVpS41.18
TBVpS10.22
PEG (NY)1.2
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 | 7.8 |
F-Score8
WACC7.58%
ROIC/WACC1.71
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 5Y21.04%
Revenue 1Y (TTM)10.29%
Revenue growth 3Y7.07%
Revenue growth 5Y4.4%
Sales Q2Q%8.92%
Revenue Next Year9.82%
Revenue Next 2Y10.6%
Revenue Next 3Y11.43%
Revenue Next 5Y12.42%
EBIT growth 1Y34.62%
EBIT growth 3Y15.02%
EBIT growth 5Y5.49%
EBIT Next Year58.56%
EBIT Next 3Y28.56%
EBIT Next 5Y21.47%
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%