SAP SE-SPONSORED ADR (SAP) Stock Fundamental Analysis
NYSE:SAP - New York Stock Exchange, Inc. - US8030542042 - ADR - Currency: USD
We assign a fundamental rating of 5 out of 10 to SAP. SAP was compared to 284 industry peers in the Software industry. While SAP has a great profitability rating, there are some minor concerns on its financial health. SAP has a decent growth rate and is not valued too expensively.
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.
Each year in the past 5 years SAP had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 7.58%, SAP belongs to the best of the industry, outperforming 81.69% of the companies in the same industry.
SAP has a Return On Equity of 12.54%. This is in the better half of the industry: SAP outperforms 79.93% 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 87.68% 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 12.30%.
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's Profit Margin of 16.31% is amongst the best of the industry. SAP outperforms 83.45% 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 92.25% of its industry peers.
SAP's Operating Margin has been stable in the last couple of years.
SAP's Gross Margin of 73.60% is fine compared to the rest of the industry. SAP outperforms 62.68% 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
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.
SAP has less shares outstanding than it did 5 years ago.
SAP has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 7.89 indicates that SAP is not in any danger for bankruptcy at the moment.
SAP has a better Altman-Z score (7.89) than 79.58% of its industry peers.
SAP has a debt to FCF ratio of 1.85. This is a very positive value and a sign of high solvency as it would only need 1.85 years to pay back of all of its debts.
The Debt to FCF ratio of SAP (1.85) is better than 69.37% 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 50.35% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.15 | ||
| Debt/FCF | 1.85 | ||
| Altman-Z | 7.89 |
ROIC/WACC1.43
WACC7.7%
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 worse Current ratio (1.17) than 66.20% of its industry peers.
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 65.49% 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 -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.
The Revenue has been growing slightly by 4.40% on average over the past years.
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
Based on estimates for the next years, SAP will show a very strong growth in Earnings Per Share. The EPS will grow by 20.66% on average per year.
The Revenue is expected to grow by 12.35% on average over the next years. This is quite good.
EPS Next Y39.67%
EPS Next 2Y29.72%
EPS Next 3Y25.76%
EPS Next 5Y20.66%
Revenue Next Year10.84%
Revenue Next 2Y11.3%
Revenue Next 3Y11.91%
Revenue Next 5Y12.35%
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
Based on the Price/Earnings ratio of 48.57, the valuation of SAP can be described as expensive.
60.56% of the companies in the same industry are more expensive than SAP, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 26.31. SAP is valued rather expensively when compared to this.
SAP is valuated quite expensively with a Price/Forward Earnings ratio of 32.90.
Compared to the rest of the industry, the Price/Forward Earnings ratio of SAP is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of SAP to the average of the S&P500 Index (22.13), we can say SAP is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 48.57 | ||
| Fwd PE | 32.9 |
4.2 Price Multiples
SAP's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. SAP is cheaper than 75.35% of the companies in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as SAP.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 54 | ||
| EV/EBITDA | 28.78 |
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)1.22
PEG (5Y)N/A
EPS Next 2Y29.72%
EPS Next 3Y25.76%
5. Dividend
5.1 Amount
SAP has a yearly dividend return of 0.90%, which is pretty low.
SAP's Dividend Yield is rather good when compared to the industry average which is at 16.44. SAP pays more dividend than 92.61% of the companies in the same industry.
With a Dividend Yield of 0.90, SAP pays less dividend than the S&P500 average, which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.9% |
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%
293.36
-8.38 (-2.78%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners40.46%
Inst Owner Change5.48%
Ins Owners5.09%
Ins Owner ChangeN/A
Market Cap342.21B
Analysts79.46
Price Target327.99 (11.8%)
Short Float %0.14%
Short Ratio0.98
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.9% |
Yearly Dividend2.55
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)0.08%
PT rev (3m)12.4%
EPS NQ rev (1m)0.26%
EPS NQ rev (3m)-1.36%
EPS NY rev (1m)0%
EPS NY rev (3m)0.27%
Revenue NQ rev (1m)-0.09%
Revenue NQ rev (3m)-2.52%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-2%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 48.57 | ||
| Fwd PE | 32.9 | ||
| P/S | 8.4 | ||
| P/FCF | 54 | ||
| P/OCF | 47.27 | ||
| P/B | 6.46 | ||
| P/tB | 22.88 | ||
| EV/EBITDA | 28.78 |
EPS(TTM)6.04
EY2.06%
EPS(NY)8.92
Fwd EY3.04%
FCF(TTM)5.43
FCFY1.85%
OCF(TTM)6.21
OCFY2.12%
SpS34.93
BVpS45.43
TBVpS12.82
PEG (NY)1.22
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 | 7.89 |
F-Score8
WACC7.7%
ROIC/WACC1.43
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 5Y20.66%
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 5Y12.35%
EBIT growth 1Y34.96%
EBIT growth 3Y15.02%
EBIT growth 5Y5.49%
EBIT Next Year58.56%
EBIT Next 3Y28.56%
EBIT Next 5Y20.97%
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%