SAP SE provides application and analytics software and software-related services for enterprises worldwide. The company offers solutions covering various lines of businesses, including asset management, commerce, finance, human resources, manufacturing, marketing, sales, service, sourcing and procurement, supply chain, and sustainability, as well as research and development, and engineering. The company was founded in 1972 and is based in Walldorf, Germany.
SAP Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Sap Se with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Sap Se ranked in the 11th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. In terms of the factors that were most noteworthy in this DCF analysis for SAP, they are:
The compound growth rate in the free cash flow of Sap Se over the past 4.95 years is 0%; that's higher than only 19.71% of free cash flow generating stocks in the Technology sector.
Sap Se's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -21.96. This coverage rate is greater than that of only 3.32% of stocks we're observing for the purpose of forecasting via discounted cash flows.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Sap Se? See GRUB, IEHC, EVOL, HLIT, and LPTH.