SAP SE ADR

SAP: XNYS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$414.00	Ypswft	Vmlh

SAP Earnings: Cloud Revenue Growth and Margins Robust; Raising Fair Value to EUR 141 From EUR 132

Julie Bhusal Sharma

Jul 23, 2024

SAP reported a solid second quarter, with cloud revenue continuing to increase forcefully. Despite management’s outlook remaining unchanged, we are increasing our fair value estimate to EUR 141 per share from EUR 132 for this narrow-moat name. We have moderately raised our midcycle operating margin assumptions based on a more precise roadmap for operational efficiencies. Despite our fair value adjustments, we view the stock as overvalued—as we believe SAP’s ERP market share will continue to decline due to fiercer competition from the likes of Workday.

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