SAP AG (SAP) AI Stock Analysis

• Market Cap: $306.99B
• Dividend Yield: 1.04%
• Average Volume (3M): 1.42M
• Price to Earnings (P/E): 38.8
• Beta (1Y): 0.98
• Revenue Growth: 11.85%
• EPS Growth: 167.23%
• Country: US
• Employees: 108,187
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 1.85
• Shares Outstanding: 1,228,000,000
• 10 Day Avg. Volume: 1,585,283
• 30 Day Avg. Volume: 1,420,470
• PEG Ratio: -1.81
• Price to Book (P/B): 6.10
• Price to Sales (P/S): 8.11
• P/FCF Ratio: 62.68
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 8.61
• Enterprise Value/Gross Profit: 11.71
• Enterprise Value/Ebitda: 26.89
• 1Y Price Target: $332.67
• Price Target Upside: 32.03% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: $301.00 ▲(19.46% Upside)

SAP's overall stock score is driven by its strong financial performance and positive earnings call, highlighting significant growth in cloud revenue and strategic AI integration. However, the high P/E ratio and mixed technical indicators suggest caution. The company's robust financial foundation and strategic focus on cloud solutions position it well for future growth, despite some valuation concerns.

Positive Factors

Cloud Revenue Growth

Sustained cloud revenue growth indicates SAP's successful transition to a cloud-focused model, ensuring recurring revenue and market competitiveness.

AI Integration

Strategic AI integration enhances SAP's product offerings, driving innovation and efficiency, which can lead to increased adoption and long-term growth.

Strong Operating Profit

Robust operating profit growth reflects efficient cost management and strong demand for SAP's solutions, bolstering financial stability.

Negative Factors

Software Licenses Revenue Decline

A sharp decline in software license revenue suggests challenges in traditional sales, potentially impacting overall revenue if not offset by cloud growth.

Delayed Bookings

Delayed bookings can hinder revenue realization and growth, affecting cash flow and operational planning in the near to medium term.

Macroeconomic Challenges

Persistent macroeconomic uncertainties can impact customer spending and SAP's revenue, posing risks to sustained growth and profitability.

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 generates revenue primarily through software licenses, cloud subscriptions, and support services. The company has shifted its focus towards cloud-based offerings, which provide recurring subscription revenue. Key revenue streams include software licenses for on-premise solutions, maintenance and support services for existing software, and cloud services, which encompass platform-as-a-service (PaaS) and software-as-a-service (SaaS) solutions. Additionally, SAP benefits from strategic partnerships with major technology companies and system integrators, enhancing its market reach and enabling collaborative solutions. The growing demand for digital transformation across industries has also contributed to SAP's earnings, as organizations increasingly invest in integrated software solutions to streamline operations and improve efficiency.

SAP AG Financial Statement Overview

Summary

SAP AG's financial performance is robust, with strong profitability and efficient operations. The balance sheet is stable with low leverage, and cash flows are generally healthy despite some recent declines in free cash flow growth. The company is well-positioned in the software application industry with a strong financial foundation.

Income Statement

SAP AG demonstrates strong profitability with a consistent gross profit margin around 73% and a net profit margin improving to 18.2% in TTM. Revenue growth is steady, with a notable increase of 16.9% in the latest period. EBIT and EBITDA margins are robust, reflecting efficient operations and cost management.

Balance Sheet

The balance sheet is solid with a low debt-to-equity ratio of 0.21, indicating prudent financial leverage. Return on equity is healthy at 15.1%, showcasing effective use of equity. The equity ratio is stable, reflecting a strong asset base supported by equity.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth, but the operating cash flow to net income ratio remains healthy at 0.38. The free cash flow to net income ratio is strong at 0.89, indicating good cash generation relative to profits.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	36.49B	34.18B	31.21B	29.52B	26.95B	27.34B
Gross Profit	26.84B	24.93B	22.53B	21.48B	19.73B	19.45B
EBITDA	11.69B	7.08B	8.03B	8.28B	10.99B	9.41B
Net Income	7.08B	3.12B	6.14B	2.28B	5.26B	5.14B
Balance Sheet
Total Assets	68.40B	74.12B	68.33B	72.16B	71.17B	58.48B
Cash, Cash Equivalents and Short-Term Investments	9.93B	11.24B	11.28B	9.86B	11.66B	6.95B
Total Debt	9.12B	10.65B	8.79B	13.09B	15.15B	15.46B
Total Liabilities	25.16B	28.31B	24.93B	29.31B	29.65B	28.55B
Stockholders Equity	42.81B	45.44B	43.16B	40.13B	38.85B	29.71B
Cash Flow
Free Cash Flow	6.48B	4.42B	5.55B	4.77B	5.42B	6.38B
Operating Cash Flow	7.31B	5.22B	6.33B	5.65B	6.22B	7.19B
Investing Cash Flow	-786.00M	-667.00M	906.00M	667.00M	-3.06B	-2.99B
Financing Cash Flow	-7.68B	-3.40B	-7.73B	-6.34B	-56.00M	-4.00B

SAP AG Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 251.96
• 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 SAP, the sentiment is Negative. The current price of 251.96 is below the 20-day moving average (MA) of 267.44, below the 50-day MA of 267.14, and below the 200-day MA of 279.57, indicating a bearish trend. The MACD of -3.96 indicates Positive momentum. The RSI at 34.83 is Neutral, neither overbought nor oversold. The STOCH value of 13.48 is Positive, 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
CRM	79 Outperform	$240.55B	36.69	11.20%	0.69%	8.33%	19.69%
NOW	76 Outperform	$182.96B	103.84	16.81%	―	21.05%	28.68%
INTU	74 Outperform	$182.71B	47.93	20.29%	0.67%	15.63%	30.62%
SAP	73 Outperform	$306.99B	38.78	16.30%	1.04%	11.85%	167.23%
WDAY	72 Outperform	$61.97B	103.82	6.66%	―	14.21%	-62.56%
SNOW	69 Neutral	$89.69B	―	-42.45%	―	28.37%	-35.49%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

SAP AG Corporate Events

SAP SE Reports Strong Q3 2025 Cloud Revenue Growth

On October 22, 2025, SAP SE announced its financial results for the third quarter of 2025, highlighting significant growth in its cloud services. The company’s cloud revenue increased by 22%, with the Cloud ERP Suite revenue rising by 26%, reflecting a strong market position and customer adoption of its comprehensive business solutions. SAP’s operating profit also saw a notable increase, underscoring the company’s robust performance and strategic focus on profitability and cash flow, despite challenging economic conditions. This growth positions SAP favorably for future revenue ambitions and strengthens its industry standing.