SAP SE (SAPGF)
NEUTRALFundamental
63
Price
$185.64
Market Cap
$215.70B
Part 1 · What the company is worth
Overview
SAP makes the software many large companies run their core operations on — accounting, supply chain, manufacturing and human resources — bundled into a system called ERP (enterprise resource planning). Once a company builds its finance and operations processes around SAP's system, that software becomes the record of how the business runs, which is why customers rarely switch providers. SAP is shifting its customers from software installed on their own servers to cloud subscriptions it hosts and updates itself.
How it makes money
Cloud subscriptions are billed recurring, usually annual, fees tied to usage or number of users, and now make up the majority of what SAP calls cloud and software revenue; older on-premise licenses are sold once and then generate smaller annual maintenance fees, a mix that is shrinking as customers migrate. Services revenue, a smaller and less profitable slice, comes from consultants helping customers implement and migrate these systems, typically billed by the project or by time.
Revenue by segment
Cloud subscription revenue, now SAP's largest line, plus remaining on-premise software licenses and their maintenance fees.
Consulting, implementation and training services that help customers deploy and migrate SAP software, billed separately from the software itself.
Competitive moat
Switching costs · WideSAP's software becomes deeply embedded in how a large company records its finances and runs its operations, with years of customization, staff training and connections to other internal systems built on top of it. Independent studies have found that switching ERP providers typically costs several times the original software price and takes over a year, which is why SAP keeps the large majority of its enterprise customers even when rivals offer comparable features.
What drives demand
Moderately cyclicalRecurring cloud subscriptions make revenue more predictable than a typical software license business, since customers rarely cancel core ERP systems even when budgets tighten. Still, corporate IT spending does slow in downturns, and the pace at which customers commit to new cloud migrations can stretch out when their own businesses are under pressure.
Key risks
- Intense competition in enterprise software — The company faces sustained competition from large rivals such as Oracle and Salesforce, who are also embedding AI features into cloud applications, which pressures pricing and can slow customer wins.
- Cloud migration execution risk — Moving large customers from on-premise systems to the cloud involves remediating custom code, cleaning data and securing internal support within the customer's organization, and on-premise license revenue is declining meaningfully as this transition proceeds.
- Data, antitrust and regulatory exposure — The company is subject to data-access and antitrust-related claims, including allegations of lock-in effects, as well as dependence on third-party cloud infrastructure and web services it does not fully control.
The case for
Buyers see a company that has successfully shifted the majority of its revenue to recurring cloud subscriptions, still holds the deepest customer lock-in in enterprise software, and can raise prices on a captive base of hundreds of thousands of customers as it layers AI features onto the same ERP backbone.
The case against
Sellers worry that the on-premise license decline is eroding a historically high-margin revenue stream faster than cloud subscriptions can fully replace it, that cloud backlog growth is expected to moderate as the business scales, and that well-funded rivals embedding their own AI agents could chip away at renewal pricing over time.
Written by the editors, published on August 18, 2026
Direct competitors
Who this company fights with for the same customers
No editorial profile for this company yet
No competitor list for this company yet.
Balance Sheet & Liquidity
Revenue
$38.19B
Trailing 12 months (through 6/30/2026)
Net Income
$7.80B
Trailing 12 months (through 6/30/2026)
Free Cash Flow
$9.09B
Total Equity
$44.74B
Total Liabilities
$9.94B
Current Ratio
1.15
Interest Coverage
-
Debt/EBITDA
0.85
Earnings Per Share
Revenue & Net Income
Free Cash Flow
Income Breakdown
Historical statement
Margins over time
Debt over time
How heavy the debt is
Growth grid
Growth — Revenue
Fair Value Estimation
Fair Value
$146.32
Current Price
$185.64
Margin of Safety
-26.9%
Fair Value Range
$101.17 - $191.46
Estimation Methods
Valuation Metrics
P/E Ratio
27.98
ROE
18.3%
P/B Ratio
4.82
P/FCF
23.73
Gross Margin
73.7%
ROIC
15.2%
Profitability Radar
Value Creation (Economic Moat)
ROIC
15.2%
WACC
9.9%
ROIC − WACC
+5.3 pp
ROIC exceeds the cost of capital — the company is creating value for shareholders.
Fundamental Analysis Criteria
Passed (14)
- Price CAGR 8.32%
- ROIC 15.2%
- Gross Margin 73.7%
- P/FCF 23.73
- Debt/Equity ratio
- Positive Free Cash Flow
- CapEx intensity
- Current Ratio
- Debt/EBITDA
- ROE 17.6%
- Revenue Growth 5Y 6.1%
- Analyst Consensus 77% Buy
- Earnings Quality (OCF/NI) 1.26
- Net Margin Trend 20.4% vs 9.1%
Failed (5)
- P/B Ratio 4.82
- DCF valuation (Overvalued)
- Earnings Surprise avg -0.8%
- PEG Ratio 3.78
- Piotroski F-Score 2/9
Unavailable (8)
- EPS data insufficient
- Dividend Payout NaN%
- Operating Margin NaN%
- Interest Coverage
- Return on Tangible Assets
- Low reliance on intangibles
- Price below Graham Number
- Share Dilution (missing shares data)
Piotroski F-Score
Serious financial concerns
Earnings Quality
High quality: earnings backed by cash
Share Dilution
Buying back shares. Shareholder friendly
Governance
Executive Team
| Name | Title | Age |
|---|---|---|
| Mr. Christian Klein | CEO & Member of Executive Board | 45 |
| Mr. Lars Lamade | Head of Global Sponsorships & Deputy Chairperson of the Supervisory Board | 54 |
| Mr. Dominik Asam | CFO & Member of Executive Board | 56 |
| Mr. Thomas Saueressig | Member of Executive Board | 40 |
| Mr. Sebastian Steinhaeuser | Chief Strategy Officer & COO and Member of Executive Board | 39 |
| Ms. Gina Vargiu-Breuer | Chief People Officer, Labor Director & Member of Executive Board | 49 |
| Mr. Muhammad Alam | Lead Product Engineering & Member of Executive Board | 47 |
| Mr. Andreas Hahn | Chairperson of Works Council Europe & Works Council Europe Rep Member of Supervisory Board | 54 |
| Jakub Cerny | Demand Manager & Works Council Europe Representative Member of Supervisory Board | 43 |
| Mr. Pascal Demat | Solution Advisor HCM & Works Council Europe Representative Member of Supervisory Board | 58 |
Audit Risk
10
Board Risk
2
Compensation Risk
1
Shareholder Rights Risk
1
Part 2 · The price and when to enter
This part won't tell you whether the company is worth owning: it helps you choose when to buy it, once the fundamentals have convinced you. Inside: technical analysis, potential, historical drawdowns, gamma exposure.
Latest News
Recent headlines for SAPGF, sourced from Markets Gazette.