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.
