SAP SE (SAP) AI Stock Analysis

• Market Cap: €287.87B
• Dividend Yield: 0.92%
• Average Volume (3M): 1.27M
• Price to Earnings (P/E): 44.0
• Beta (1Y): 0.98
• Revenue Growth: 10.29%
• EPS Growth: 159.53%
• Country: DE
• Employees: 108,187
• Sector: Technology
• Sector Strength: 94
• Industry: Software - Application
• EPS (TTM): 1.50
• Shares Outstanding: 1,228,504,300
• 10 Day Avg. Volume: 1,626,341
• 30 Day Avg. Volume: 1,269,216
• 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: €299.94
• Price Target Upside: 21.61% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 19

• Rating: 70 Outperform
• Price Target: €280.00 ▲(13.52% Upside)

SAP SE's strong financial performance is the most significant factor driving its stock score, supported by robust revenue growth, profitability, and cash flow management. Technical analysis presents a mixed outlook with neutral momentum indicators. However, the high P/E ratio suggests potential overvaluation, which slightly offsets the overall score.

Positive Factors

Acquisitions and Partnerships

The SmartRecruiters acquisition highlights management's focus on providing best-of-breed solutions with AI applicability, enhancing SAP's offerings in talent acquisition software.

Financial Performance

SAP has delivered better than expected 2Q25 results.

Revenue Growth

Cloud revenue growth accelerated to 28%, beating consensus at 27%.

Negative Factors

Currency Impact

FX movements have been unfavorable, creating headwinds for SAP's financial estimates in 2025 and 2026.

Management Commentary

Shares fell 5% due to prudent language from management on the demand environment, indicating longer sales cycles with US public entities and manufacturing.

SAP SE Business Overview & Revenue Model

Company Description

SAP SE is a leading global technology company specializing in enterprise software solutions. Founded in 1972 and headquartered in Walldorf, Germany, SAP SE operates in the software and information technology services sector, offering a wide range of products that help businesses manage operations and customer relations. Its core products include enterprise resource planning (ERP) software, business analytics, customer relationship management (CRM), supply chain management, and human capital management solutions. SAP's solutions are designed to support businesses of all sizes across various industries, enabling them to streamline processes, increase efficiency, and drive growth.

How the Company Makes Money

SAP SE generates revenue primarily through the sale of software licenses, subscriptions to cloud-based services, and support services. The company offers both on-premise and cloud-based solutions, with a growing emphasis on cloud services due to the increasing demand for scalable and flexible business solutions. Key revenue streams include software licenses, cloud subscriptions and support, and professional services such as consulting and training. SAP has also formed strategic partnerships with major technology companies like Microsoft, Google, and Amazon Web Services to enhance its cloud offerings and expand its market reach. These partnerships, along with continuous innovation and development of new technologies, play a significant role in SAP's revenue growth and market presence.

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: Positive
• Last Price: 246.65
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:SAP, the sentiment is Positive. The current price of 246.65 is below the 20-day moving average (MA) of 253.26, below the 50-day MA of 257.18, and below the 200-day MA of 247.80, indicating a neutral trend. The MACD of -2.54 indicates Negative momentum. The RSI at 52.07 is Neutral, neither overbought nor oversold. The STOCH value of 45.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:SAP.

SAP SE Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TMV	76 Outperform	€1.43B	11.20	179.08%	―	9.74%	26.28%
NEM	73 Outperform	€15.28B	81.16	23.55%	0.40%	25.33%	6.58%
SAP	70 Outperform	€287.87B	43.98	15.83%	0.92%	10.29%	159.53%
AOF	69 Neutral	€1.80B	39.08	64.04%	1.87%	10.61%	12.63%
MUM	58 Neutral	€863.49M	28.71	35.14%	3.63%	-16.41%	-1.83%
Sector *	50 Neutral	C$3.26B	5.36	-49.37%	9.08%	2.10%	-13.02%