Rankings Software, cloud & internet SAP
SAP
83
15070100
A view of the same findings, not a new score. How it works
A strong score: the model found few serious problems, but analysts see limited upside from here.
Biggest deductions
- Multiples vs own history and peers−5
- Moat and future segment (AI)−3
- Demand and estimates−3
Strengths
- Order book and FCF guidance+2
- Insider buying+2
- Buybacks and dividend+1
How the score is built
From 100 to 83, step by step: points off for the business, the price and the cracks, back for documented strengths, then three data adjustments.
Start
Score
Hover or select a step to see what drove it. Steps with findings open them below.
Key numbers
As of 3 Nov 2026. Analyst targets tend to be optimistic; read upside as a hint, not a forecast.
- Price
- 203.95 EUR
- Median analyst target
- 240.00 EUR
- Upside to median
- +17.7%
- Analysts
- 29
- Target range
- 175.00 – 290.00 EUR
- 52-week change
- −8%
- P/E (trailing)
- 29.5
- Forward P/E
- 26.1
- PEG
- 1.61
Findings
Every deduction and every plus, with its source. Open a step to read them.
Business
Is the company getting stronger, not just bigger? · 4 findings−8 of −30
- −2Margin and quality of earningsThe operating margin has risen from 19.3% (2023) to 28.8% (TTM), but in Q2 non-IFRS operating profit grew only 9% (constant currency) vs 11% in revenue, the cloud gross margin fell to 74.6% from 75.2% because of token costs and higher R&D (18.7% of revenue), and non-IFRS EPS rose only 6%.
- −3Moat and future segment (AI)SAP's moat is switching costs in ERP, but AI agents threaten the seat-based pricing model in application software. A BofA survey of 325 IT leaders shows that AI monetisation is still at an early stage and that most customers are only testing; the roughly 400 AI agents only launch in autumn 2026.
- −2Quality of growthTotal revenue has grown only 6.4% (TTM, reported). Cloud (EUR 23.1bn TTM, +22% in Q2) is growing strongly, but support is falling (11.3 → 10.0bn since 2024) and licences have halved, because growth is largely migration of existing customers; 60% of customers are still on-premise, and the migration peak is expected in 2027.
- −1Capital allocationGoodwill of EUR 30.4bn equals 67% of equity (45.2bn), and acquisitions (EUR 1.7bn TTM: Reltio, Dremio, Prior Labs) dilute operating profit, so 2026 guidance was cut by EUR 100m.
Price
Today's multiples against the company's own history and its peers. · 1 finding−5 of −35
- −5Multiples vs own history and peersTrailing P/E 27.6 vs 26.5–88 in 2021–25; forward P/E 23.7 vs 18.8–40.2; EV/EBITDA 17.6 vs 15.2–30.7; P/FCF 24.3 vs 23.5–62. The lowest valuation since 2022 after −18% over 52 weeks, but still an FCF yield of only about 4.1% (4.7% on FCF guidance of about EUR 10bn); Microsoft trades at a forward P/E of about 26 with higher growth.
Cracks
Cash flow, customers, debt, insiders, guidance and what sits behind the headline numbers. · 3 findings−6 of −35
- −3Demand and estimatesQ2 revenue (EUR 9.88bn) and non-IFRS EPS (EUR 1.59) were below consensus, and management expects growth in the current cloud backlog to slow slightly over the rest of 2026 because of macro uncertainty.
- −2Regulation (EU competition case)On 9/7 the European Commission made SAP's commitments binding in the on-premise maintenance case: re-entry fees are abolished, retroactive support fees are capped, and customers get easier access to third-party support – globally for ten years. No fine, but it weakens the lock-in in the support business (EUR 10bn).
- −1CurrencyThe weak dollar takes about 2 percentage points off reported growth (Q2: revenue +9% vs +11% at constant currency; cloud +22% vs +24%), and operating profit guidance is only given at constant currency.
Plus
Only documented strengths. · 4 findings+6 of +15
- +2Order book and FCF guidanceCurrent cloud backlog EUR 22.9bn, +26% at constant currency (an acceleration from Q1); Cloud ERP Suite +27%. FCF is expected at about EUR 10bn in 2026 vs 8.24bn in 2025.
- +2Insider buyingCEO Christian Klein and two other top executives bought shares for about EUR 900,000 in August 2026, and board member Thomas Saueressig bought 1,500 shares at EUR 178.30 on 26/8.
- +1Buybacks and dividendBuybacks of EUR 2.9bn and dividends of 2.9bn TTM = 5.8bn, clearly below FCF of 8.7bn; the share count has fallen 0.8% in a year (1,168m → 1,154m).
- +1Net cashNet cash EUR 1.7bn (11.6bn of cash vs 9.9bn of debt); interest cover 24.6x.
Caveats
What the score does not capture, or where the data is weak.
Q3 results 21/10. Revenue growth in EUR (+9% in Q2) is about 2 percentage points lower than at constant currency. A large part of cloud growth is conversions of existing on-premise customers who must switch before ECC support ends in 2027; what happens to growth after the migration peak has not been explored. AI monetisation is still at the pilot stage. SBC of EUR 0.8bn (about 2% of revenue) is not deducted from FCF. Hasso Plattner's possible sales in 2026 have not been examined.
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