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SAP SE SAP Stock Quote

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Morningstar‘s Stock Analysis SAP

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Is it the right time to buy or sell?

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Revenue Tops the Charts in SAP’s Q3 as Cloud Drives Top Line; Shares Undervalued

Julie Bhusal Sharma Equity Analyst

Analyst Note

| Julie Bhusal Sharma |

SAP reported mixed third-quarter results, coming in well above our top-line expectations (thanks to stellar cloud growth) while missing our earnings per share forecasts as its venture portfolio underwent significant value decreases. SAP reiterated its guidance for the full year except for free cash flow assumptions, which were lowered slightly. We are maintaining our fair value estimate for SAP at EUR 131 per share as we remain confident in our thesis that SAP will have tougher competition amid mass cloud migrations (meaning increased churn). Yet, for those who remain, we think customer stickiness will be restored and continued scale and mix toward cloud revenues will uplift margins further—driving our model. All in all, our thesis implies that market share losses don’t necessarily impute bleak prospects. Shares are up 6% upon results to near EUR 97 per shar share, though we believe SAP shares are still undervalued.

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Key Statistics SAP

Company Profile SAP

Business Description

Founded in 1972 by former IBM employees, SAP provides database technology and enterprise resource planning software to enterprises around the world. Across more than 180 countries, the company serves 440,000 customers, approximately 80% of which are small to medium-size enterprises.

Dietmar-Hopp-Allee 16
Walldorf, BW, 69190, Germany
T +49 6227747474
Industry Software - Application
Most Recent Earnings Sep 30, 2022
Fiscal Year End Dec 31, 2022
Employees 112,632