DAX 40-listed software giant SAP SE (DE:SAP) will announce its third-quarter results for FY23 tomorrow after the market closes. According to the TipRanks’ consensus, the expected EPS for the quarter is €1.34, as compared to the EPS of €1.12 reported in the same quarter last year. The sales forecast for the quarter is €7.76 billion, up from €7.55 billion in the previous quarter.
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Based in Germany, SAP is a leading software company specializing in enterprise solutions. The company has gained a dominant position in the industry, driven by the growing adoption of its cloud solutions.
In its second-quarter results, the company achieved an impressive performance in its cloud business revenue, which grew by 22% during the period. Analysts expect this momentum to continue in the cloud business, with an expected growth of 23% in its revenues on a year-over-year basis. The company also reported a cloud backlog worth €11.54 billion in Q2, which reflects sustained demand for the company’s solutions. The company is confident in its cloud business and upholds its outlook for ongoing operations, anticipating higher growth in both top-line revenue and operating profit.
During Q3, the company also completed the sale of its full stake in Qualtrics to Silver Lake Management and CPP Investments for $7.7 billion. This move was part of its approach to focusing more on its cloud business.
Analysts Remain Bullish
Ahead of its earnings, HSBC analyst Antonin Baudry reiterated his Buy rating on the stock yesterday, predicting an upside of 16.8% in the share price. Baudry expects the company to drive growth riding on current trends such as “digitalization, shift to cloud, AI and data analytics, sustainability, and decarbonization.”
14 days ago, analyst James Goodman from Barclays also confirmed his Buy rating on the stock at a forecast of 16% growth.
SAP Share Price Forecast
According to TipRanks’ rating consensus, SAP stock has a Strong Buy rating, backed by recommendations from 15 analysts. It includes 12 Buy and three Hold Ratings. The SAP share price forecast is €140.52, indicating an upside of 13.3% on the share price.
