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SAP SE
(NYSE:SAP)
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Rating:74Outperform
Price Target:
$208.00
▲(30.00% Upside)
Action:Reiterated
Date:07/25/26
The score is driven primarily by strong financial performance—high margins, improving profitability, and solid free cash flow—supported by constructive earnings-call indicators like cloud/backlog growth and maintained top-line/FCF outlook. Offsetting factors include a weaker technical trend (below key longer-term moving averages with negative MACD) and near-term profitability headwinds from M&A dilution and elevated investment spending, while valuation appears reasonable with a modest dividend.
Positive Factors
High margins and improving profitability
SAP's elevated and improving margins reflect durable pricing power and scalable software economics. Strong gross and operating margins indicate efficient cloud and on‑prem operations, supporting reinvestment into products, stable free cash flow generation, and resilience through business-cycle swings.
Negative Factors
Near‑term margin dilution from M&A and AI investments
Selective acquisitions and elevated AI R&D/token consumption are increasing operating costs and pressuring margins in the near term. Integration and higher runtime/token expenses can persist over multiple quarters until scale benefits materialize, tempering operating profit expansion.
Read all positive and negative factors
Positive Factors
Negative Factors
High margins and improving profitability
SAP's elevated and improving margins reflect durable pricing power and scalable software economics. Strong gross and operating margins indicate efficient cloud and on‑prem operations, supporting reinvestment into products, stable free cash flow generation, and resilience through business-cycle swings.
Read all positive factors
SAP SE Key Performance Indicators (KPIs)
Any
Cloud Backlog
Reflects the total value of future cloud service contracts, providing insight into anticipated revenue streams and the strength of customer demand for SAP's cloud offerings.
Reflects the total value of future cloud service contracts, providing insight into anticipated revenue streams and the strength of customer demand for SAP's cloud offerings.
Data provided by:
The Fly
The FlySAP SE (SAP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$210.02B
Dividend Yield1.6%
Average Volume (3M)2.69M
Price to Earnings (P/E)23.0
Beta (1Y)0.96
Revenue Growth14.13%
EPS Growth31.10%
CountryUS
Employees108,187
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)6.85
Shares Outstanding1,228,504,300
10 Day Avg. Volume3,677,755
30 Day Avg. Volume2,687,472
Financial Highlights & Ratios
PEG Ratio0.27
Price to Book (P/B)5.39
Price to Sales (P/S)6.55
P/FCF Ratio30.37
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$218.89Price Target Upside36.81% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
EPS Forecast (FY)8.1
Revenue Forecast (FY)$45.81B
SAP SE Business Overview & Revenue Model
Company Description
SAP SE, founded in Walldorf, Germany, in 1972, is a global provider of diverse software applications, technology, and services. The company's core enterprise resource planning (ERP) platform, SAP S/4HANA, offers robust functionalities for finance,...
How the Company Makes Money
SAP primarily generates revenue by licensing and subscribing customers to its enterprise software and related cloud services, complemented by ongoing support and services. Key revenue streams typically include: (1) Software and cloud subscriptions...
SAP SE Earnings Call Summary
Earnings Call Date:Jul 23, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 21, 2026
Earnings Call Sentiment Positive
The call emphasized strong top‑line momentum (CCB +26%, cloud revenue +24%, total revenue +11%), robust cash flow (EUR 3.0B) and successful product and AI platform launches with early customer proof points and high Beta interest. At the same time, management flagged near‑term margin dilution from selective M&A, elevated R&D/tokens and marketing investments, a decline in software license sales, and macro uncertainty that could slightly decelerate backlog growth into year‑end. Overall, the business trajectory and pipeline signal confidence in longer‑term AI‑driven growth, while short‑term profitability is being modestly tempered by investment and integration costs.Positive Updates
Strong Current Cloud Backlog Growth
Current cloud backlog (CCB) grew 26% year-on-year to almost EUR 23 billion, an acceleration versus Q1 and a positive forward-looking indicator for bookings.
Negative Updates
Operating Profit Outlook and H2 Dilution
Management adjusted the operating profit outlook by EUR 0.1 billion (down) to reflect dilutive impacts of recent acquisitions; Dremio and Prior Labs are expected to weigh on H2 2026 results by a low triple‑digit million euro amount.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Current Cloud Backlog Growth
Current cloud backlog (CCB) grew 26% year-on-year to almost EUR 23 billion, an acceleration versus Q1 and a positive forward-looking indicator for bookings.
Read all positive updates
Company Guidance
SAP said it is maintaining its financial outlook for all top-line parameters and free cash flow while adjusting its non‑IFRS operating profit outlook down by €0.1bn to roughly a €11.2–11.8bn range to reflect recent M&A; the company reiterated a target 80–90% expense‑to‑revenue ratio and warned of a slight deceleration in current cloud backlog (CCB) exiting the year despite CCB reaching ≈€23bn (up 26%). In Q2 cloud revenue grew 24% to €6.3bn (cloud ERP suite +27%, now 88% of cloud revenue), total revenue was €9.9bn (+11%), SaaS/PaaS continued to outpace the market, software licenses were down 32%, IFRS cloud gross margin was 74.3% (non‑IFRS 74.6%, −0.7pp YoY), IFRS operating profit was €2.6bn (+8%) and non‑IFRS operating profit €2.7bn (+9%), free cash flow was €3.0bn, IFRS EPS €1.89 (+30%) and non‑IFRS EPS €1.59 (+6%). Management said Reltio added <1pp to CCB growth but generated an IFRS post‑tax loss of ~€10m in Q2 (non‑IFRS impact in the high single‑digit millions), and that Dremio plus Prior Labs will weigh on H2 by a very low‑triple‑digit‑million euro amount while AI/token and R&D investments are expected to drive productivity and payoffs over the coming years.SAP SE Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
82
Very Positive
Cash Flow
80
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 38.19B | 36.80B | 34.18B | 31.21B | 29.52B | 26.95B |
| Gross Profit | 27.79B | 26.81B | 24.93B | 22.53B | 21.48B | 19.73B |
| EBITDA | 12.89B | 12.07B | 7.08B | 8.03B | 8.28B | 10.99B |
| Net Income | 7.80B | 7.16B | 3.12B | 6.14B | 2.28B | 5.26B |
Balance Sheet | ||||||
| Total Assets | 75.61B | 70.33B | 74.12B | 68.33B | 72.16B | 71.17B |
| Cash, Cash Equivalents and Short-Term Investments | 11.63B | 9.77B | 11.24B | 11.28B | 9.86B | 11.66B |
| Total Debt | 0.00 | 8.07B | 10.65B | 8.79B | 13.09B | 15.15B |
| Total Liabilities | 30.36B | 25.11B | 28.31B | 24.93B | 29.31B | 29.65B |
| Stockholders Equity | 44.74B | 44.73B | 45.44B | 43.16B | 40.13B | 38.85B |
Cash Flow | ||||||
| Free Cash Flow | 8.71B | 7.94B | 4.42B | 5.55B | 4.77B | 5.52B |
| Operating Cash Flow | 9.44B | 8.65B | 5.22B | 6.33B | 5.65B | 6.22B |
| Investing Cash Flow | -1.31B | -1.33B | -667.00M | 906.00M | 667.00M | -3.06B |
| Financing Cash Flow | -5.42B | -7.85B | -3.40B | -7.73B | -6.34B | -56.00M |
SAP SE Technical Analysis
Positive
160.00
Price Trends
166.45
Positive
169.64
Positive
201.53
Negative
Market Momentum
-2.81
Negative
51.20
Neutral
34.58
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SAP, the sentiment is Positive. The current price of 160 is below the 20-day moving average (MA) of 161.79, below the 50-day MA of 166.45, and below the 200-day MA of 201.53, indicating a neutral trend. The MACD of -2.81 indicates Negative momentum. The RSI at 51.20 is Neutral, neither overbought nor oversold. The STOCH value of 34.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SAP.
SAP SE Risk Analysis
SAP SE disclosed 13 risk factors in its most recent earnings report. SAP SE reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
SAP SE Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $148.00B | 21.22 | 14.95% | 1.30% | 10.98% | 34.24% | |
74 Outperform | $210.02B | 23.02 | 17.98% | 1.84% | 14.13% | 31.10% | |
74 Outperform | $86.30B | 19.10 | 23.29% | 1.62% | 15.07% | 33.69% | |
72 Outperform | $39.05B | 49.80 | 10.41% | ― | 13.70% | 76.27% | |
69 Neutral | $113.81B | 69.09 | 13.77% | ― | 22.19% | 0.19% | |
66 Neutral | $103.32B | -83.32 | -57.21% | ― | 31.07% | 16.46% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
SAP
SAP SE
183.62
-95.87
-34.30%
INTU
Intuit
316.07
-451.46
-58.82%
CRM
Salesforce
184.02
-64.61
-25.99%
WDAY
Workday
160.34
-61.88
-27.85%
NOW
ServiceNow
111.23
-71.64
-39.18%
SNOW
Snowflake
293.28
88.26
43.05%
SAP SE Corporate Events
SAP SE Posts Double-Digit Cloud Growth and Updates 2026 Profit Outlook After Q2 Results
Jul 28, 2026
SAP SE reported second-quarter 2026 results on July 23, showing continued momentum in its cloud transformation, with cloud revenue up 22% to €6.3 billion and current cloud backlog rising 27% to €22.9 billion, or 26% at constant currenc...
SAP Shareholders Approve All Proposals at 2026 Virtual AGM
May 8, 2026
SAP SE held its 2026 virtual Annual General Meeting of Shareholders on May 5, 2026, where investors voted on a wide range of governance, financial and structural items. Shareholder participation ranged around 67%–69% of capital stock, unders...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.