SAP SE
🇩🇪 SAP.XETRA · Frankfurt · DE0007164600
Technology
EUR 148.90 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
23.9
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 148.90 ÷ 6.24 = 23.9
TTM period through: 2025-12-31
Forward P/E (estimated): 20.4
Based on analyst estimates
Reference: Provider P/E (Trailing): 24.4
Yield (Fwd)
1.68%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 1.68%
Net Debt/EBITDA (TTM)
-0.0x
Latest quarter: -0.0x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2025-12-31
Latest quarter (2025-12-31): -0.0x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
40.1%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 37.4%
Cash Flow Payout (TTM): 30.5%
FCF Coverage (TTM): 3.01x
ROE
16.1%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
14.2x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
SAP is a dominant global leader in enterprise software with a pristine balance sheet and exceptionally high customer switching costs. While the recent quarterly loss was merely a temporary restructuring charge masking strong underlying cloud growth, the combination of a low 1.68% yield, elevated valuation (P/E ~24x), and technology sector classification makes it a structural mismatch for conservative, income-focused portfolios. Not recommended for new positions, as better opportunities exist in more traditional essential service sectors with higher yields.
Sector Context
SAP provides enterprise resource planning (ERP) software that acts as the operational backbone for large global corporations. While the high switching costs create utility-like recurring revenues, the technology sector is explicitly excluded from this strategy due to the rapid pace of innovation, constant reinvestment requirements, and the persistent risk of technological obsolescence.
Temporary Opportunity Identified
The Q1 2024 net loss of -€828 million was entirely driven by a €2.2 billion one-time restructuring provision. The underlying business remains highly robust with cloud backlog growing 27%, masking the actual operational strength.
📊 Strategy Analysis
- • Maintains an exceptional balance sheet with a Net Debt/EBITDA of -0.01, indicating net cash and significant financial flexibility.
- • Operates with a strong competitive moat driven by extremely high switching costs for its core enterprise software.
- • The recent quarterly net loss is an accounting artifact from a €2.2 billion one-time restructuring charge, while underlying cloud revenues grew an impressive 24%.
⚠ What to Watch
- • Operates in the Technology sector, representing a fundamental strategy mismatch due to rapid innovation cycles and obsolescence risks.
- • Current dividend yield of 1.68% falls significantly below the strategy's strict >3% minimum requirement for income generation.
- • Valuation multiples are highly elevated with a TTM P/E of 23.88, well outside the target 8-15x range for value-oriented dividend investors.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-05
Disclaimer: This information is for educational purposes only. Not financial advice.