SAP

Analysis of SAP share price

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If you are thinking of trading in the German stock market, some little-known stocks like SAP stock may be worth your attention. Quickly find out how to analyze this stock thanks to some information that you absolutely must know, its live price or a complete analysis of its recent history.

Latest news

Qualtrics IPO drives SAP share price up

26/01/2021 - 13h17

The upcoming IPO of the start-up Qualtrics, largely owned by SAP, will further increase the share price on the market after a new estimate of its IPO price.

Elements that can influence the price of this asset:

Analysis N°1

The SAP Group should rapidly implement a strategy aimed at strongly and consistently developing its activities while the market is still consolidating.The results of these strategies should then be followed with great attention.

Analysis N°2

Another point, the financial situation of this company is now more solid which could enable it to strengthen its presence in emerging markets through targeted and strategic investments in certain specific countries.

Analysis N°3

We are also aware that SAP has recently heavily invested in research and development.It is clear that each new product launched by this company could assist in gaining new market shares for this group.

Analysis N°4

Finally, we would also like to see the SAP Group widen its product portfolio through the acquisition of companies in various sectors.

Analysis N°5

Firstly, it would be advantageous to closely monitor the major competitor of the SAP Group, the American company Oracle, which holds tightly onto its market share.

Analysis N°6

The increasing development of ‘Open Source’ technologies could also represent a threat for the SAP Group.

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General presentation of SAP

We would now like to give you some more information about SAP and its activities, with details of its main areas of activity and sources of income. This will enable you to understand how the company may evolve in the longer or shorter term.
The SAP SE group for Système Anwendungen Produkte is an American company specialising in the IT sector. More precisely, it is currently the world's leading developer and seller of integrated software packages.
To better understand the group's activities, they can be divided into different divisions according to the share of turnover they generate, as follows:

  • Firstly, the bulk of the group's activity concerns the sale of software packages, which generates more than 85% of turnover. This includes financial management software, human resources software, customer relations software, procurement software and others. The company also offers maintenance services.
  • Finally, the remaining 15% of the company's turnover comes from consulting and training services.

It is also important to know the geographical distribution of the SAP group's revenues. SAP generates 14.7% of its revenues in Germany, 29.5% in Europe, the Middle East and Africa, 33.3% in the United States, 7.3% in the Americas, 4.8% in Japan and 10.4% in Asia-Pacific.
A good knowledge of the company's areas of focus is of course essential in order to interpret the signals of fundamental analysis and understand how this stock may evolve in the market over the longer or shorter term.

Analysis of SAP share price
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The major competitors of SAP

Let us now discover the competitive environment of the SAP group, which must of course face certain major players in its sector of activity and likely to take market share from it.

Oracle 

First of all, we will of course take into account the competition from the Oracle Corporation group. This American company, founded in 1977 by Larry Ellison, offers several flagship products such as the Oracle Database database management system, the Oracle Weblogic Server application server, the Oracle E-Business Suite ERP package and the Oracle Cloud Infrastructure cloud computing offering. Currently, the Oracle Group is the second largest software company in terms of revenue and market capitalisation.

Microsoft Corporation 

Another major competitor of SAP is of course the giant Microsoft, which is an American multinational computer and microcomputer company that has been in existence since 1975 and was founded by Bill Gates and Paul Allen. This group is also one of the largest market capitalisations on the NASDAQ market along with Apple and Amazon. Since 2014, the company has been led by Satya Nadella who succeeded Steve Ballmer and Bill Gates as CEO. The group now employs 148,000 people across nearly 120 countries worldwide.

Salesforce 

Still among SAP's major competitors is the Salesforce Group, an American software company based in San Francisco. The company is active in the distribution of Internet-based business software and the hosting of business applications. But it is best known for its various customer relationship management solutions. Salesforce was also a forerunner of Cloud Computing in 2014 and is the world leader in customer relationship tools with more than 100,000 corporate customers including Pernod-Ricard, Renault and Engie.

The Sage Group

Finally, the last competitor of SAP is the multinational company The Sage Group which is a software publisher based in Newcastle. Currently, Sage is the third largest ERP company in Europe after SAP and Dassault Systemes and before Software AG and Datev. The Sage Group currently operates in approximately 24 countries worldwide and offers its solutions in over 160 countries. It is also listed on the London Stock Exchange and is a constituent of the FTSE 100 index.


The major partners of SAP

The SAP Group has based its development strategy on the implementation of specific partnerships with competitors or companies in related sectors.Here are a few examples:

Pandesic

In 1997 the SAP Group joined with its competitor Intel for the implementation of a joint company named Pandesic.The latter was finally abandoned in the year 2000 due to a lack of long term profitability.

Nokia

In 2009 SAP became a partner of Nokia for the creation of a joint company in the domain of authentication products and anti fraud services.

IBM

In 2017 IBM and SAP announced significant investment projects in the digital transformation sector.

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The factors in favour of a rise in the SAP share price:

First of all, one of the main strengths of this technology company is its innovations. Most of the products offered by the group are highly innovative and therefore very attractive to the general public and meet new consumer needs.

On the other hand, the SAP Group is strongly oriented towards new innovations and is constantly seeking to develop new products and technological solutions. To this end, it invests heavily in research and development in order to stay one step ahead of its competitors and to offer effective and useful products.

The SAP group's positioning in its sector of activity is of course another undeniable strong point. The group is one of the leaders in its field and thus earns the trust of consumers and customers. This positioning has been acquired by the group largely thanks to the very high quality of its products which have made its reputation over the years.

Recently, the SAP group has also been able to seduce professionals by integrating the new version of Business Objects into its solutions on the market. As a result, professionals can now purchase SAP software and deploy it completely independently.

Finally, organizations using the SAP Business One model can help the group directly target larger companies with a minimum of 100 employees.

The factors in favour of a drop in the SAP share price:

As we have just seen, the German SAP group has the qualities necessary for its future development and this could lead you to take a bullish position on its share today. But before embarking on this strategy, you should also take the time to analyze the few flaws in this stock and the weaknesses of the group that could hinder this growth.

First of all, the SAP group is strongly threatened by very strong competition from some of its competitors. It should be noted for example that the ERP developed by SAP is currently the one and only product of the group that can be compared to the products developed by the American giant Oracle which is one of the leaders in this market.

Although the SAP group's results have improved slightly over the last few years, it has still not managed to make real progress in a truly convincing manner and therefore does not sufficiently reassure its investors and shareholders.

The SAP group must still make efforts to diversify its activities and thus protect itself against the risks of exposure to one and the same sector of activity. Indeed, its activities are very targeted and its product range is still not very varied, which could be detrimental to it in the more or less long term.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions.

Frequently Asked Questions

In which markets does the SAP Group operate?

The SAP group is currently present in three major geographical areas, namely Europe, Middle East and Africa, the Americas with the headquarters of SAP America, which includes North America and Latin America at Newton Square in Pennsylvania, and finally Asia Pacific and Japan or APJ, which includes Japan, Australia, India and several other Asian countries. The SAP group also has a network of more than 115 different subsidiaries and research and development firms.

What are the figures you need to know about SAP?

Among the interesting facts and figures to know about SAP is that the company has approximately 388,000 customers worldwide. It operates 140,000 installations in 130 different countries and employs 91,000 people, including 15,000 consultants and trainers and 7,700 service and maintenance technicians. The group also has 77 training centres, 7 support centres and 9 application and content development centres.

What is the assessed risk for the SAP action?

According to estimates and analyses of this value, the risk on holding SAP shares is 36.99% over 10 years. However, this risk falls to 26.20% over three years and rises to 39.96% over 6 months. It is also noted that the highest risk is that over 3 months at 44.72%.

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