SAP shares have a strong debt-to-equity ratio but their quick ratio which reads 1.10 is strong and might cause problems for them later in the future.
Even though there was a rise of +9.16% in revenue, the company failed to succeed in outperforming the industry average of 43.22%. For the most recent quarter, the net income has dropped by -8.29%. The 9.16% yoy growth of SAP’s revenue has gone up that of the industry average by 3.84%. For the past 12 months, SAP SE revenue has gone up by 5.32%. The sustained growth in their revenue has helped boost their earnings per share.
The 12-month return on equity has significantly fallen to 15.03 in comparison to the same data for other companies in the same industry. This shows that there is a major weakness within the organization over the past one year. Comparing them to other companies in the industry and the overall Technology sector, the industry average is -132.56 while 17.29 is of the sector.
SAP total operating cash flow had jumped to $499 million compared to $408 million in the same quarter last year. Also, looking at the price to cash flow of the company and the industry average, the 20.94 ratio of the stock is lower than the industry’s 34.27.
SAP SE (NYSE:SAP) has a price-to-earnings ratio of 27.00 which is lower than the 32.03 industry average at the moment. In addition to their unfavorable P/E ratio, SAP SE has maintained a gross margin of 70.91. This shows whether the company has what it takes to effectively turn the revenue into profit.
The company’s ROA is 8.68 when compared to 8.52 for the stocks operating in the same industry. This can be attributed to the strength recorded in the net income produced by total assets. Comparing it to other companies in the sector, SAP SE ROE is above 17.29 that of both the sector average.
The operating profit margin for SAP SE (SAP) is 23.09%, a figure which is considered to be weak. It has gone 15.23 from the 22.38 over the past 5 years. In addition to this, their operating margin is 7.86 higher than the industry average.
The net profit margin which stood at 16.67 on average in the past 5 years has dropped to 16.55 in the last 12 months. Added to that, this ratio has surpassed the industry net margin that stands at 10.60.
Analysts meanwhile rate SAP SE (NYSE:SAP) as a buy. Still some above discussed indicators of the $127.67B company show strength while others show weakness. There is little evidence at the moment to justify the expectation of the SAP shares to either perform positively or negatively when compared to other stocks. The primary strengths of SAP SE can be witnessed in its increased revenue, growing earnings per share, higher return on equity, increased operating cash and high net margin. Subsequently, financial analysis have also identified some weak areas that includes high debt, relatively high P/E ratio, lower return on assets and low net margin.