SAP AG (SAP) AI Stock Analysis

• Market Cap: $295.73B
• Dividend Yield: 0.7%
• Average Volume (3M): 1.42M
• Price to Earnings (P/E): 85.7
• Beta (1Y): 1.00
• Revenue Growth: 9.55%
• EPS Growth: -2.28%
• Country: US
• Employees: 109,121
• Sector: Technology
• Sector Strength: 40
• Industry: Software - Application
• EPS (TTM): 2.89
• Shares Outstanding: 1,228,504,300
• 10 Day Avg. Volume: 1,156,538
• 30 Day Avg. Volume: 1,418,578
• PEG Ratio: 14.79
• Price to Book (P/B): N/A
• Price to Sales (P/S): 8.98
• Price to Cash Flow (P/CF): N/A
• P/FCF Ratio: 0.00
• 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: $313.89
• Price Target Upside: 26.31% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

SAP's overall stock score reflects strong financial health and promising growth in cloud services. The positive sentiment from the earnings call, despite some challenges, supports a favorable outlook. However, the high P/E ratio and recent income decline are concerns that temper the score.

Positive Factors

AI and Technology Integration

SAP's strengthening position around AI is expected to boost growth and margin expansion.

Partnerships and Collaborations

SAP's partnership with Databricks to integrate their Data Intelligence Platform with SAP's new Business Data Cloud aims to address fragmented data in large enterprises, potentially driving significant revenue growth.

Negative Factors

Leadership Changes

There is potential risk of disruption from the 2024 restructuring program and the departure of Chief Revenue Officer Scott Russell.

Macroeconomic Risks

Risks are associated with macro conditions, particularly new US tariffs on EU and China companies, which could delay Cloud/AI projects.

SAP AG Business Overview & Revenue Model

Company Description

SAP SE, together with its subsidiaries, provides applications, technology, and services worldwide. It offers SAP S/4HANA that provides software capabilities for finance, risk and project management, procurement, manufacturing, supply chain and asset management, and research and development; SAP SuccessFactors solutions for human resources, including HR and payroll, talent and employee experience management, and people and workforce analytics; and spend management solutions that covers direct and indirect spend, travel and expense, and external workforce management. The company also provides SAP customer experience solutions; SAP Business Technology platform that enables customers and partners to build, integrate, and automate applications; and SAP Business Network, a business-to-business collaboration platform that helps digitalize key business processes across the supply chain and enables communication between trading partners. In addition, it offers SAP Signavio to help customers to discover, analyze, and understand their business process operations; SAP's industry cloud solutions that provides modular solutions addressing industry-specific functions; Taulia solutions for working capital management to help enable customers mitigate the effects of inflation by providing visibility into working capital and access to liquidity; and sustainability solutions and services. SAP SE was founded in 1972 and is headquartered in Walldorf, Germany.

How the Company Makes Money

SAP AG generates revenue primarily through the sale of software licenses, cloud subscriptions, and support services. A significant portion of its income comes from its cloud business, which includes software-as-a-service (SaaS), platform-as-a-service (PaaS), and infrastructure-as-a-service (IaaS) offerings. The company also earns substantial revenue from its on-premise software licenses and related support and maintenance services. Additionally, SAP has established strategic partnerships with major technology companies and consulting firms, expanding its market reach and providing integrated solutions to its clients. These collaborations, coupled with its extensive portfolio of products and services, contribute significantly to SAP's overall earnings.

SAP AG Financial Statement Overview

Summary

SAP demonstrates strong financial health with consistent revenue growth and solid cash flow generation. Despite the increase in debt and a recent net income decline, the company's financial foundation remains robust, supporting its growth trajectory in the competitive software industry.

Income Statement

SAP's income statement shows strong performance with a consistent revenue growth trend over the years. The Gross Profit Margin and Net Profit Margin have remained healthy, indicating effective cost management and profitability. EBIT and EBITDA margins are robust, reflecting operational efficiency. However, the decline in net income from 2023 to 2024 is a concern that needs monitoring.

Balance Sheet

The balance sheet reflects a stable financial position with a solid equity base. The Debt-to-Equity ratio is manageable, suggesting prudent leverage. The Return on Equity remains strong, indicating good returns for shareholders. The Equity Ratio is healthy, showing a strong asset base. However, the increase in total debt from 2023 to 2024 requires attention to ensure long-term solvency.

Cash Flow

SAP's cash flow statement indicates strong operating cash flows, with a positive Free Cash Flow, supporting future growth investments. The Free Cash Flow to Net Income ratio remains favorable, demonstrating cash generation capability. While the Free Cash Flow growth rate dipped from 2023 to 2024, the overall cash flow health remains robust.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
34.18B	31.21B	30.87B	27.84B	27.34B
	Gross Profit
24.93B	22.60B	21.94B	19.89B	19.45B
	EBIT
4.67B	5.79B	4.67B	2.88B	6.62B
	EBITDA
6.47B	7.50B	6.48B	8.92B	8.26B
	Net Income Common Stockholders
3.12B	6.14B	2.28B	5.26B	5.14B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
11.24B	11.28B	9.86B	11.66B	6.95B
	Total Assets
74.12B	68.33B	72.16B	71.17B	58.48B
	Total Debt
10.65B	8.79B	14.37B	15.15B	15.95B
	Net Debt
1.04B	666.00M	5.37B	6.25B	10.64B
	Total Liabilities
28.31B	24.93B	29.31B	29.65B	28.55B
	Stockholders Equity
45.44B	43.16B	40.13B	38.85B	29.71B
Cash Flow		Free Cash Flow
4.42B	5.55B	4.77B	5.42B	6.38B
	Operating Cash Flow
5.22B	6.33B	5.65B	6.22B	7.19B
	Investing Cash Flow
-667.00M	906.00M	667.00M	-3.06B	-2.99B
	Financing Cash Flow
-3.40B	-7.73B	-6.34B	-56.00M	-4.00B

SAP AG Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 248.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SAP, the sentiment is Negative. The current price of 248.5 is below the 20-day moving average (MA) of 267.21, below the 50-day MA of 276.11, and above the 200-day MA of 238.98, indicating a neutral trend. The MACD of -1.53 indicates Negative momentum. The RSI at 48.07 is Neutral, neither overbought nor oversold. The STOCH value of 33.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SAP.

SAP AG Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INTU	79 Outperform	$156.98B	52.47	17.43%	0.69%	13.73%	9.93%
SAP	77 Outperform	$295.73B	85.75	7.12%	0.70%	9.55%	-2.28%
WDAY	75 Outperform	$60.74B	111.05	6.15%	―	16.94%	-62.24%
CRM	75 Outperform	$231.37B	37.84	10.26%	0.66%	8.72%	51.47%
NOW	72 Outperform	$149.53B	105.50	16.53%	―	22.44%	-18.31%
TEAM	59 Neutral	$49.17B	―	-32.59%	―	23.19%	11.01%
Sector *	57 Neutral	$18.57B	9.42	-13.42%	2.72%	5.01%	-23.43%