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SAP SE
(NYSE:SAP)
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Rating:79Outperform
Price Target:
$275.00
▲(26.77% Upside)
Action:Reiterated
Date:10/23/26
The score is driven primarily by strong financial performance (high margins, improving ROE, modest leverage) and a supportive earnings call (record results and reaffirmed guidance). The main offsets are premium valuation (P/E ~30) and near-term technical overheating (RSI ~81, Stoch ~95) despite a strong uptrend.
Positive Factors
Cloud Growth and Backlog
Rapid cloud revenue and backlog expansion supports a growing base of recurring subscription income and strengthens visibility beyond individual software transactions. Continued migration into SAP’s cloud ERP suite can deepen customer integration, improve cross-selling opportunities, and reinforce the company’s position in core enterprise workflows.
Negative Factors
Cloud Margin Pressure
A declining cloud gross margin shows that growth is currently accompanied by cost pressure rather than pure operating leverage. Investments in software, infrastructure, sovereign cloud, retailing, and acquisitions may keep profitability under pressure, requiring execution of automation and efficiency plans to protect the quality of recurring revenue growth.
Read all positive and negative factors
Positive Factors
Negative Factors
Cloud Growth and Backlog
Rapid cloud revenue and backlog expansion supports a growing base of recurring subscription income and strengthens visibility beyond individual software transactions. Continued migration into SAP’s cloud ERP suite can deepen customer integration, improve cross-selling opportunities, and reinforce the company’s position in core enterprise workflows.
Read all positive factors
SAP SE Key Performance Indicators (KPIs)
Any
Cloud Backlog
Reflects the total value of future cloud service contracts, providing insight into anticipated revenue streams and the strength of customer demand for SAP's cloud offerings.
Reflects the total value of future cloud service contracts, providing insight into anticipated revenue streams and the strength of customer demand for SAP's cloud offerings.
Data provided by:
The Fly
The FlySAP SE (SAP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$264.30B
Dividend Yield1.26%
Average Volume (3M)2.02M
Price to Earnings (P/E)30.5
Beta (1Y)0.96
Revenue Growth14.13%
EPS Growth31.10%
CountryUS
Employees112,019
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)7.07
Shares Outstanding1,228,504,300
10 Day Avg. Volume2,494,926
30 Day Avg. Volume2,023,242
Financial Highlights & Ratios
PEG Ratio0.25
Price to Book (P/B)5.39
Price to Sales (P/S)6.55
P/FCF Ratio28.64
Enterprise Value/Market Cap0.93
Enterprise Value/Revenue6.22
Enterprise Value/Gross Profit8.55
Enterprise Value/Ebitda19.01
Forecast
1Y Price Target
$271.09Price Target Upside24.97% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
EPS Forecast (FY)8
Revenue Forecast (FY)$45.56B
SAP SE Business Overview & Revenue Model
Company Description
SAP SE, founded in Walldorf, Germany, in 1972, is a global provider of diverse software applications, technology, and services. The company's core enterprise resource planning (ERP) platform, SAP S/4HANA, offers robust functionalities for finance,...
How the Company Makes Money
SAP primarily makes money by selling subscriptions to cloud software (software-as-a-service) and related support and services, alongside revenue from its large installed base of on-premise software licenses and maintenance. Key revenue streams typ...
SAP SE Earnings Call Summary
Earnings Call Date:Oct 21, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Jan 28, 2027
Earnings Call Sentiment Positive
The call was strongly positive, supported by record quarterly revenue, 25% cloud revenue growth, 26% cloud backlog growth, market share gains, broad AI adoption, strong customer wins, and improved cash generation. The main negatives were lower cloud gross margin, declines in services and software licenses revenue, macroeconomic and Q4 booking uncertainty, higher accounts receivable, and the need to continue improving AI agents and managing investment-related margin pressures. Highlights significantly outweighed lowlights.Positive Updates
Record Revenue and Strong Profit Growth
Q3 total revenue reached €10.3 billion, up 12%, marking the first time in SAP's history that quarterly revenue crossed €10 billion. Operating profit grew 18% to more than €3 billion, while non-IFRS operating profit surpassed €3 billion.
Negative Updates
Cloud Gross Margin Decline
IFRS cloud gross margin was 73.9% and non-IFRS cloud gross margin was 74.3%, down 0.7 percentage points year on year.
Read all updates
Q3-2026 Updates
Positive
Negative
Record Revenue and Strong Profit Growth
Q3 total revenue reached €10.3 billion, up 12%, marking the first time in SAP's history that quarterly revenue crossed €10 billion. Operating profit grew 18% to more than €3 billion, while non-IFRS operating profit surpassed €3 billion.
Read all positive updates
Company Guidance
SAP expects a slight deceleration in constant currencies current cloud backlog growth in 2026, while reaffirming its previous guidance for current cloud backlog, operating profit, and free cash flow; it expects to trend towards the upper end of its cloud and software revenue outlook, implying around 23% cloud revenue growth in Q4, and continues to plan for total revenue growth to accelerate in 2027. Q4 accounts for around 50% of annual bookings volume, full-year free cash flow guidance remains €10 billion, SAP expects up to €3 billion efficiency gains over the course of the next 2 years, and remains firmly committed to containing growth in total operating expenses, including cost of goods sold, to 80% to 90% growth of the top line.SAP SE Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
82
Very Positive
Cash Flow
78
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 39.33B | 36.80B | 34.18B | 31.21B | 29.52B | 26.95B |
| Gross Profit | 28.62B | 26.81B | 24.93B | 22.53B | 21.48B | 19.73B |
| EBITDA | 12.87B | 12.07B | 6.47B | 7.16B | 6.32B | 10.33B |
| Net Income | 8.03B | 7.16B | 3.12B | 6.14B | 2.28B | 5.26B |
Balance Sheet | ||||||
| Total Assets | 77.63B | 70.36B | 74.12B | 68.33B | 72.16B | 71.17B |
| Cash, Cash Equivalents and Short-Term Investments | 9.52B | 9.77B | 11.24B | 11.28B | 9.70B | 11.66B |
| Total Debt | 10.77B | 8.07B | 10.65B | 8.79B | 13.09B | 15.14B |
| Total Liabilities | 30.38B | 25.13B | 28.31B | 24.93B | 29.31B | 29.65B |
| Stockholders Equity | 46.73B | 44.75B | 45.44B | 43.16B | 40.19B | 38.85B |
Cash Flow | ||||||
| Free Cash Flow | 9.14B | 8.42B | 4.41B | 5.46B | 4.77B | 5.52B |
| Operating Cash Flow | 9.84B | 9.16B | 5.21B | 6.25B | 5.65B | 6.22B |
| Investing Cash Flow | -2.62B | -965.00M | -93.00M | 1.39B | 667.00M | -3.06B |
| Financing Cash Flow | -6.43B | -8.74B | -3.96B | -8.13B | -6.34B | -56.00M |
SAP SE Technical Analysis
Positive
216.93
Price Trends
214.89
Positive
192.47
Positive
190.93
Positive
Market Momentum
6.22
Negative
80.77
Negative
93.13
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SAP, the sentiment is Positive. The current price of 216.93 is below the 20-day moving average (MA) of 217.50, above the 50-day MA of 214.89, and above the 200-day MA of 190.93, indicating a bullish trend. The MACD of 6.22 indicates Negative momentum. The RSI at 80.77 is Negative, neither overbought nor oversold. The STOCH value of 93.13 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SAP.
SAP SE Risk Analysis
SAP SE disclosed 13 risk factors in its most recent earnings report. SAP SE reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
SAP SE Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $199.52B | 21.98 | 20.15% | 0.72% | 11.23% | 58.19% | |
79 Outperform | $264.30B | 30.46 | 17.84% | 1.26% | 14.13% | 31.10% | |
79 Outperform | $154.62B | 95.11 | 13.77% | ― | 22.19% | 0.19% | |
78 Outperform | $116.70B | 26.85 | 70.20% | 2.31% | 6.74% | 9.46% | |
70 Outperform | $49.16B | 41.00 | 16.78% | ― | 13.83% | 126.19% | |
64 Neutral | $113.86B | -101.49 | -53.56% | ― | 32.04% | 23.46% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
SAP
SAP SE
240.59
-34.48
-12.54%
ADP
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307.94
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CRM
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250.29
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WDAY
Workday
209.99
-33.29
-13.68%
NOW
ServiceNow
157.00
-30.83
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SNOW
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313.96
60.97
24.10%
SAP SE Corporate Events
SAP SE Posts Double-Digit Cloud Growth and Updates 2026 Profit Outlook After Q2 Results
Jul 28, 2026
SAP SE reported second-quarter 2026 results on July 23, showing continued momentum in its cloud transformation, with cloud revenue up 22% to €6.3 billion and current cloud backlog rising 27% to €22.9 billion, or 26% at constant currenc...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.