Hi, Shrewd!        Login  
Shrewd'm.com 
A merry & shrewd investing community
Best Of PoliticsBest OfAll BoardsThe Shrewd’m WeeklyLearn to InvestHow to Become Shrewd
Search
Shrewd'm.com Merry shrewd investors
Search
Best Of PoliticsBest OfAll BoardsThe Shrewd’m WeeklyLearn to InvestHow to Become Shrewd


The week's question
In December 2024, in the thread "Re: BRK: Why Not XOM?", BreckHutHigh asked the members: "What about the long road trips with kids?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
Answer this questionContinue to Shrewd'mThis note won't appear again
Halls of Shrewd'm / US Policy
Unthreaded | Threaded | Whole Thread (22) |
Author: mungofitch 🐝🐝🐝 GOLD
SHREWD
  😊 😞

Number: of 84350 
Subject: SAP SE
Date: 01/29/26 7:22 AM
Post New | Post Reply | Report Post | Recommend It!
No. of Recommendations: 12
SAP SE (SAP.DE) at 168.68, down 13% today on an earnings release that apparently was not well received. The giant of the European software space.
Also listed in the US as SAP, $202.88 in pre-market as I type, down 14.1%.

Interesting firm, I wish I knew it more deeply.

As part of a long term ongoing switch from license sales to recurring revenue, net earnings have plateaued for a while. The same sort of drawn out short-term-pain-long-term-gain effect that Adobe went through.

I hear their cloud stuff is doing very well indeed.

You can see that sales growth rate has held up well, but net earnings haven't--falling net margins, which may ultimately be transient. "Analyst opinion" is that this is coming to and end, and even some of the more conservative analysts are expecting double digit earnings increases for at least the next 5 years. Several forecasts are around 15-16%/year, cloud division maybe 20%/year for a while. Value Line mentions EPS growth of 26.5%/year for the 3-5 year horizon on sales growth of 9%/year, so a big rebound in net margins.

Bad news? Alas sales growth is very much better at top line than at the per-share level - share counts have risen a lot over time, e.g. up about 5.5%/year in the last decade. And I think (?) that is due overwhelmingly to a whole lot of not-very-European share- and option-based comp, not acquisitions. Ick.

Still, one might see 10 in on-trend EPS after not that long. 15 year median multiple around 25x range, higher during earnings dips, because their revenue is considered so reliable.

Indicated dividend is about 1.20% for those who care. I think I heard a rumour that they were going to cut their payout ratio and put more capital into growth initiatives. But as mentioned, I don't really know them deeply.

If researching, be sure to check whether you're looking at IFRS bookkeeping or not, there are figures out there under different standards which are not always commensurable, like the euro and USD figures.

Jim
(no position, yet anyway)
Post New | Post Reply | Report Post | Recommend It!
Print the post
Members reply directly to mungofitch here — and replies get answered. Reading is free; so is joining the conversation. Join Shrewd'm »
This community has written 562 posts about Non-US Stocks. The article-length ones it recommended most:
Greggs PLC (GRG.L) · 20 recs · 2025
Topicus: Not Constellation · 16 recs · 2026
Unite Group (UTG), UK, falling knife. · 13 recs · 2025
SKAN · 11 recs · 2025
MELI - Brazilian darling · 10 recs · 2025
Unthreaded | Threaded | Whole Thread (22) |


Announcements
US Policy FAQ
Contact Shrewd'm
Contact the developer of these message boards.

Best Of Politics | Best Of | Favourites & Replies | All Boards | Followed Shrewds | Open Questions | Moving a community