Don't Miss These Facts About SAP SE ADS

Now trading at a price of $118.08, SAP has moved 1.6% so far today on a volume of 800,364, compared to its average of 1,079,308. In contrast, the S&P 500 index moved -0.8%.

SAP shares moved -15.0% over the last 52 weeks, with a high of $139.82 and a low of $78.22. During this time, the stock lagged the S&P 500 index by -3.1%. As of January 2022, the company's 50-day average price is $107.3408. SAP SE, together with its subsidiaries, operates as an enterprise application software company worldwide. The large-cap Technology company has 112,632 full time employees and is based in Walldorf, Germany. SAP has returned a 1.7% dividend yield over the last 12 months.

Exceptional EPS Growth with Low Leverage Levels:

2019-12-31 2020-12-31 2021-12-31
Revenue (MM) $27,553 $27,338 $27,842
Revenue Growth n/a -0.78% 1.84%
Gross Margins 69.7% 71.2% 71.5%
Gross Margins Growth n/a 2.15% 0.42%
Operating Margins 20.3% 24.2% 17.3%
Operating Margins Growth n/a 19.21% -28.51%
Earnings Per Share $2.8 $4.35 $4.56
EPS Growth n/a 55.36% 4.83%
Free Cash Flow (MM) $2,679 $6,378 $5,423
FCF Growth n/a 138.07% -14.97%
Capital Expenditures (MM) -$817 -$816 -$800
Net Debt / EBITDA 1.06 0.81 0.47

SAP Is Reasonably Priced:

Compared to the Technology sector's average of 26.5, SAP has a trailing twelve month P/E ratio of 40.3 and, according to its EPS guidance of 5.95, an expected P/E ratio of 19.8. SAP's PEG ratio is 1.34 based on its 30.0% average growth rate of historical and projected earnings per share. This implies that the company's shares are fairly valued — assuming it can maintain this level of growth.

SAP is undervalued in terms of its equity because its P/B ratio is 3.2 compared to its sector average of 5.57. The company's shares are currently trading 107.9% above their fair value as expressed by Benjamin Graham's formula:

√(22.5 * 3-year average EPS * book value per share) = √(22.5 * 3.9 * 36.772) = $56.8

SAP's excessive valuation in terms of earnings multiples is somewhat compensated by its low leverage levels and strong cash flow growth.

SAP Has an Average Rating of Buy:

9 analysts are following SAP SE ADS and have set target prices ranging from $107.23 to $171.18 per share. On average, they have given the company a rating of buy. At the current price of $118.08, SAP is trading -10.14% away from its average analyst target price of $131.4 per share, implying an analyst consensus of some upside potential for the stock.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.