SAP SE-SPONSORED ADR (SAP) Stock Fundamental Analysis
USA - NYSE:SAP - US8030542042 - ADR
271.64 USD
+1.12 (+0.41%)
272.25 USD
+0.61 (+0.22%)
SAP gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 282 industry peers in the Software industry. Both the health and profitability get an excellent rating, making SAP a very profitable company, without any liquidiy or solvency issues. SAP has a correct valuation and a medium growth rate. These ratings could make SAP a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
In the past year SAP was profitable.
In the past year SAP had a positive cash flow from operations.
Each year in the past 5 years SAP has been profitable.
SAP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
SAP has a Return On Assets of 9.56%. This is amongst the best in the industry. SAP outperforms 84.75% of its industry peers.
SAP has a better Return On Equity (15.95%) than 83.33% of its industry peers.
Looking at the Return On Invested Capital, with a value of 13.00%, SAP belongs to the top of the industry, outperforming 89.72% 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 11.88%.
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
SAP's Profit Margin of 18.23% is amongst the best of the industry. SAP outperforms 82.27% of its industry peers.
SAP's Profit Margin has declined in the last couple of years.
SAP's Operating Margin of 27.04% is amongst the best of the industry. SAP outperforms 90.43% of its industry peers.
SAP's Operating Margin has been stable in the last couple of years.
The Gross Margin of SAP (73.80%) is better than 62.06% 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
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.
Compared to 5 years ago, SAP has less shares outstanding
Compared to 1 year ago, SAP has a worse debt to assets ratio.
2.2 Solvency
SAP has an Altman-Z score of 7.84. This indicates that SAP is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of SAP (7.84) is better than 78.01% of its industry peers.
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.
SAP's Debt to FCF ratio of 1.35 is fine compared to the rest of the industry. SAP outperforms 71.99% 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.
With a Debt to Equity ratio value of 0.15, SAP perfoms like the industry average, outperforming 50.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.15 | ||
| Debt/FCF | 1.35 | ||
| Altman-Z | 7.84 |
ROIC/WACC1.66
WACC7.82%
2.3 Liquidity
A Current Ratio of 1.03 indicates that SAP should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.03, SAP is doing worse than 70.21% of the companies in the same industry.
A Quick Ratio of 1.03 indicates that SAP should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.03, SAP is doing worse than 69.50% of the companies in the same industry.
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
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.
SAP shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -2.38% yearly.
SAP shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.29%.
The Revenue has been growing slightly by 4.40% on average over the past years.
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
SAP is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 20.96% yearly.
The Revenue is expected to grow by 12.52% on average over the next years. This is quite good.
EPS Next Y36.22%
EPS Next 2Y27.37%
EPS Next 3Y24.83%
EPS Next 5Y20.96%
Revenue Next Year9.63%
Revenue Next 2Y10.45%
Revenue Next 3Y11.33%
Revenue Next 5Y12.52%
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
Based on the Price/Earnings ratio of 42.18, the valuation of SAP can be described as expensive.
SAP's Price/Earnings ratio is in line with the industry average.
SAP is valuated expensively when we compare the Price/Earnings ratio to 27.53, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 31.89, SAP can be considered very expensive at the moment.
Based on the Price/Forward Earnings ratio, SAP is valued a bit cheaper than 61.70% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of SAP to the average of the S&P500 Index (23.04), we can say SAP is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.18 | ||
| Fwd PE | 31.89 |
4.2 Price Multiples
SAP's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. SAP is cheaper than 78.37% of the companies in the same industry.
63.83% 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 | 41.79 | ||
| EV/EBITDA | 24.22 |
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 24.83% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.16
PEG (5Y)N/A
EPS Next 2Y27.37%
EPS Next 3Y24.83%
5. Dividend
5.1 Amount
With a yearly dividend of 0.99%, 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 30.34. SAP pays more dividend than 92.55% of the companies in the same industry.
With a Dividend Yield of 0.99, SAP pays less dividend than the S&P500 average, which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.99% |
5.2 History
The dividend of SAP is nicely growing with an annual growth rate of 7.95%!
SAP has been paying a dividend for at least 10 years, so it has 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
41.94% 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.
DP41.94%
EPS Next 2Y27.37%
EPS Next 3Y24.83%
271.64
+1.12 (+0.41%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners40.23%
Inst Owner Change-0.09%
Ins Owners8.07%
Ins Owner ChangeN/A
Market Cap315.18B
Analysts78.92
Price Target343.24 (26.36%)
Short Float %0.28%
Short Ratio1.5
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.99% |
Yearly Dividend2.54
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)-0.31%
PT rev (3m)3.24%
EPS NQ rev (1m)-0.09%
EPS NQ rev (3m)-5.88%
EPS NY rev (1m)0.98%
EPS NY rev (3m)-3.62%
Revenue NQ rev (1m)0.35%
Revenue NQ rev (3m)-0.49%
Revenue NY rev (1m)-0.16%
Revenue NY rev (3m)-1.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.18 | ||
| Fwd PE | 31.89 | ||
| P/S | 7.56 | ||
| P/FCF | 41.79 | ||
| P/OCF | 37.25 | ||
| P/B | 6.61 | ||
| P/tB | 26.66 | ||
| EV/EBITDA | 24.22 |
EPS(TTM)6.44
EY2.37%
EPS(NY)8.52
Fwd EY3.14%
FCF(TTM)6.5
FCFY2.39%
OCF(TTM)7.29
OCFY2.68%
SpS35.95
BVpS41.07
TBVpS10.19
PEG (NY)1.16
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 | 7.84 |
F-Score8
WACC7.82%
ROIC/WACC1.66
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 Y36.22%
EPS Next 2Y27.37%
EPS Next 3Y24.83%
EPS Next 5Y20.96%
Revenue 1Y (TTM)10.29%
Revenue growth 3Y7.07%
Revenue growth 5Y4.4%
Sales Q2Q%8.92%
Revenue Next Year9.63%
Revenue Next 2Y10.45%
Revenue Next 3Y11.33%
Revenue Next 5Y12.52%
EBIT growth 1Y34.62%
EBIT growth 3Y15.02%
EBIT growth 5Y5.49%
EBIT Next Year56.23%
EBIT Next 3Y28.74%
EBIT Next 5Y21.3%
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%