SAP SE (SAP) AI Stock Analysis

• Market Cap: €263.83B
• Dividend Yield: 1.14%
• Average Volume (3M): 1.54M
• Price to Earnings (P/E): 37.2
• Beta (1Y): 1.01
• Revenue Growth: 9.70%
• EPS Growth: 161.70%
• Country: DE
• Employees: 108,187
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 1.59
• Shares Outstanding: 1,228,504,300
• 10 Day Avg. Volume: 1,114,652
• 30 Day Avg. Volume: 1,544,298
• PEG Ratio: -1.80
• Price to Book (P/B): 6.06
• Price to Sales (P/S): 8.06
• P/FCF Ratio: 62.29
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €297.67
• Price Target Upside: 44.96% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 18
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: €224.00 ▲(9.08% Upside)

SAP SE's overall stock score is primarily driven by its strong financial performance, characterized by robust revenue growth, high profitability, and effective cash flow management. However, technical analysis indicates bearish momentum with oversold conditions, and the valuation suggests potential overvaluation. These factors collectively moderate the overall score.

Positive Factors

Strong Financial Position

SAP's robust financial health, characterized by low leverage and a healthy equity ratio, ensures resilience against economic fluctuations and supports sustained growth.

Cash Generation Ability

Strong cash flow growth enhances SAP's financial flexibility, enabling it to invest in growth initiatives and weather potential downturns effectively.

Major Partnership Expansion

The expanded partnership with AWS on sovereign cloud solutions strengthens SAP's market position in Europe, catering to digital sovereignty needs and driving long-term growth.

Negative Factors

EU Antitrust Probe

The EU antitrust investigation could lead to regulatory challenges and potential fines, impacting SAP's operations and competitive positioning in the long term.

Competitive Pressure

The antitrust probe highlights competitive pressures in the software support market, which may force SAP to alter its business practices, affecting profitability.

Potential Overvaluation Concerns

Perceived overvaluation could limit stock price appreciation and investor interest, impacting SAP's ability to raise capital or pursue strategic investments.

SAP SE Business Overview & Revenue Model

Company Description

SAP SE, together with its subsidiaries, operates as an enterprise application software company worldwide. The company operates through three segments: Applications, Technology & Support; Qualtrics; and Services. It offers SAP S/4HANA, an ERP suite with intelligent technologies, such as artificial intelligence, machine learning, and advanced analytics; SAP SuccessFactors Human Experience Management provides cloud-based solutions, such as a human resources management system for core HR and payroll, talent management, employee experience management, and people analytics; and intelligent spend management solutions, including products branded under the SAP Ariba, SAP Concur, and SAP Fieldglass names. The company also provides SAP customer experience solutions; SAP Business Technology platform that enables customers and partners to extend and customize SAP applications in a cloud-native way; and SAP Business Network that enable companies to extend their ecosystem, react to supply chain disruptions, discover new trading partners, and find new opportunities. In addition, it offers business process intelligence solutions aim to help customers analyze their operations, understand their process bottlenecks, and improve their business process landscape; Experience solutions; SAP's industry cloud provides modular solutions addressing industry-specific functions; and SAP's ecosystem build, sell, service, and run SAP solutions and technology, as well as sustainable business solutions, services, and partnerships solutions. SAP SE was founded in 1972 and is headquartered in Walldorf, Germany.

How the Company Makes Money

SAP generates revenue primarily through software licensing, cloud subscriptions, and maintenance services. The company offers various licensing models, including perpetual licenses and subscription-based licenses for its cloud offerings. A significant portion of revenue comes from its cloud services, which have seen rapid growth as businesses increasingly adopt cloud technologies. Additionally, SAP earns revenue from support and maintenance contracts for its software products, providing ongoing services and updates. The company also benefits from strategic partnerships with technology firms and system integrators, which enhance its market reach and capabilities, contributing to its overall earnings.

SAP SE Financial Statement Overview

Summary

SAP SE's financial performance is robust, highlighted by strong revenue growth, high profitability, and effective cash flow management. The company has low leverage and a healthy equity ratio, indicating financial stability and a strong position for sustained growth.

Income Statement

SAP SE has demonstrated strong revenue growth of 5.0% over the past year, with impressive gross and EBIT margins of 73.7% and 26.8% respectively for the TTM. Net profit margin at 18.2% indicates robust profitability. The company has maintained consistent revenue growth over the years, showcasing its competitive edge in the software industry.

Balance Sheet

The balance sheet reveals a healthy equity ratio of 59.9%, signifying financial stability. The debt-to-equity ratio is 0.21, indicating low leverage, which reduces financial risk. Return on equity at 16.0% for the TTM reflects efficient use of equity to generate profits. The company maintains a strong asset base, crucial for future growth.

Cash Flow

SAP SE's operating cash flow to net income ratio of 1.11 indicates solid cash generation relative to earnings. The free cash flow grew significantly by 46.1% from the previous year, enhancing financial flexibility. The free cash flow to net income ratio of 0.99 suggests that the company effectively converts its earnings into cash, supporting its operations and growth initiatives.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	35.89B	34.18B	31.21B	29.52B	26.95B	27.34B
Gross Profit	26.41B	24.93B	22.53B	21.48B	19.73B	19.45B
EBITDA	11.14B	6.47B	7.16B	6.32B	10.33B	9.41B
Net Income	6.54B	3.12B	6.14B	2.28B	5.26B	5.14B
Balance Sheet
Total Assets	68.40B	74.12B	68.33B	72.16B	71.17B	58.46B
Cash, Cash Equivalents and Short-Term Investments	10.18B	11.24B	11.28B	9.70B	11.66B	6.95B
Total Debt	8.75B	10.65B	8.79B	13.09B	15.14B	15.46B
Total Liabilities	27.00B	28.31B	24.93B	29.31B	29.65B	28.54B
Stockholders Equity	41.00B	45.44B	43.16B	40.19B	38.85B	29.72B
Cash Flow
Free Cash Flow	6.46B	4.42B	5.55B	4.77B	5.42B	6.38B
Operating Cash Flow	7.25B	5.22B	6.33B	5.65B	6.22B	7.19B
Investing Cash Flow	-449.00M	-667.00M	906.00M	667.00M	-3.06B	-2.99B
Financing Cash Flow	-6.35B	-3.40B	-7.73B	-6.34B	-56.00M	-4.00B

SAP SE Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 205.35
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:SAP, the sentiment is Negative. The current price of 205.35 is below the 20-day moving average (MA) of 225.06, below the 50-day MA of 226.84, and below the 200-day MA of 245.68, indicating a bearish trend. The MACD of -5.23 indicates Positive momentum. The RSI at 30.35 is Neutral, neither overbought nor oversold. The STOCH value of 13.34 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DE:SAP.

SAP SE Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AOF	77 Outperform	€1.78B	38.73	74.27%	1.97%	10.61%	12.46%
SAP	66 Neutral	€263.83B	37.21	16.86%	1.14%	9.70%	161.70%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
NEM	61 Neutral	€11.35B	55.58	24.84%	0.62%	25.17%	19.52%
TMV	61 Neutral	€952.78M	8.24	113.84%	―	11.14%	0.92%
MUM	60 Neutral	€680.86M	22.49	34.89%	4.57%	-33.50%	-6.00%