SAP: Upgrading To Buy After 40% Crash

SAP SE is upgraded to Buy; it trades at a forward non-GAAP P/E of 19.27x, a 21% discount to the sector median. Learn more about SAP stock here.

Summary - I'm upgrading SAP to a buy after the significant pullback, with risk-reward now favorable. - SAP trades at a forward non-GAAP P/E of 19.27x, a 21% discount to the sector median, while compounding cloud revenue at 27%. - Management is executing disciplined capital allocation, increasing share buybacks to €10 billion, and maintaining a flat cost base.

- Key risks include geopolitical disruptions, especially in the Middle East, which could materially impact guidance for the year. - I hereon share my sentiment on SAP and why I see more upside ahead. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.