The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 49 | 20.8x | 20.8x | Around median | |
Growth | 70 | 6.4% | 6.1% | Top tier | |
Quality | 85 | 19.3% | 6.6% | Top tier | |
Safety | 88 | — | 0.7x | Top tier | |
Capital Return | 61 | 1.60% | 2.02% | Around median | |
Momentum | 4 | — | 4.1% | Bottom tier | |
Sentiment | 82 | — | 3 | Top tier |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
SAP SE is a global leader in the enterprise software sector, focusing on helping companies of all sizes manage their complex operations through cloud enterprise resource planning (ERP), databases, and business AI solutions. The company generates its revenue primarily through cloud subscriptions, software licenses, and professional services associated with digital transformation, particularly through its flagship programs RISE with SAP and GROW with SAP, which support customers in migrating their legacy systems to advanced cloud environments.
During the first quarter of fiscal year 2026, SAP achieved strong results as total revenue increased by 12% to reach €9.6 billion, driven by a 27% growth in cloud revenue to reach approximately €6 billion. Revenue growth for the Cloud ERP Suite accelerated by 30%, contributing 87% of total cloud growth, while traditional software license revenue decreased by 33%, reflecting the rapid structural shift toward the cloud model.
On the profitability front, the company recorded a strong operating margin of 30%, an increase of 2.9 percentage points, which led to a 24% growth in non-IFRS operating profit to reach €2.9 billion. First-quarter free cash flow reached €3.2 billion, impacted by the payment of a €408 million legal settlement for the Teradata dispute case.
The valuation of SAP stock is in line with the analyst consensus recommending a Buy, with an average price target of $240.67, a maximum target of $265, compared to a minimum of $200. Considering the company's historical 52-week price range of $149.191 to $313.28, the stock is currently trading near fair market valuations. The future attractiveness of the valuation depends on the company's success in achieving its 2026 financial outlook and overcoming current geopolitical challenges.
Figures in the text are as of 2026-06-22; the live price is shown at the top of the page.
SAP achieved strong growth in the first quarter of 2026, as cloud revenue increased by 27% to reach approximately €6 billion. The current cloud backlog also rose by 25% to reach €21.9 billion. The Cloud ERP Suite played a key role in this performance, growing by 30% during the quarter.
Geopolitical tensions, particularly the conflict in the Middle East, affect the supply chains of SAP customers in energy-intensive industries. Management has warned that any further escalation or prolonged closure of the Strait of Hormuz could disrupt global supply chains and negatively impact investor sentiment. However, the company kept its 2026 financial outlook unchanged, relying on cost-reduction measures and expected contributions from the acquisition of Reltio.
SAP announced its intent for the imminent acquisition of Reltio, a company specializing in master data management, which recorded annual recurring revenue of $185 million by the end of 2025. This deal aims to enable SAP customers to integrate and govern non-SAP data within the Business Data Cloud platform. Management expects this transaction to support and secure the target range for 2026 cloud revenue without the need to raise previously announced forecasts.
Automated analysis for informational purposes only — not investment advice.
SAP aims to achieve an annual operational efficiency run-rate of €2 billion by the end of 2028 by integrating artificial intelligence into its internal operations. Engineering teams use tools such as Joule for ABAP programming, Claude Code, and GitHub Copilot, which contributed to increasing developer productivity by over 30%. AI also helps process 100% of technical support cases and autonomously resolve 20% of tickets.
Mainstream maintenance for legacy SAP ECC systems ends between 2028 and 2030, setting a strict timeline for customers to digitally transform. The option to transition to the SAP ERP Private Cloud version is extremely costly after this period, stimulating customers to accelerate their migration to S/4HANA Cloud. AI-powered migration tools currently offer time and cost savings of up to 30% for transformation projects.