SAP (AO) | Buy | Feedback from SAPPHIRE

Research evidence excerpt

SAP (AO) | Buy | Feedback from SAPPHIRE

SAP Buy | Target Price: EUR190.00

Company description Management

SAP is the largest European software vendor. In recent years, the group has Christian Klein, CEO

regained revenue momentum thanks to investments in mobility, real-time Dominik Asam, CFO

analytics, and cloud. Key shareholders

Free float 84.00%

Founders 11.00%

Treasury 5.00%

Investment case Valuation methodology

The ERP segment should remain quite protected from AI We value SAP based on an exit PE multiple of 16x by 2030,

disruptions for the larger player. EUR190 discounted.

Revenues should continue to steadily accelerate, with growth SAP should trade at a discount to comparable software

peaking at +12% by 2027. companies that do not generate additional sales from a

Although we do not extrapolate short-term growth rates to the migration process.

very long term, investors are likely to maintain a short-term PEG ratio of 1.5x remains qupportive

focus, given macro turbulence in Europe. Risks to our rating

Catalysts LLM or native AI start ups may take a signficant share of the AI

The stock is a compounder with strong EPS traction layer mid term

Further improvment in cash flow conversion. New entrants in the market potentially grabbing market share.

SAP looks less likely to be disrupted by AI on the longer term. When revenues should start deccelerating investors may walk

off the story (more of a 2028 story).

Key data charts

Price performance Sales split by region Sales split by division

SWOT analysis

Strengths Weaknesses

Stickiness of installed base. Excluding migration growth lower than pure SaaS players.

High visibility on sales, with over 84% from support and subscription. Compromise between growth and margins.

Large R&D team likely to keep innovating.