SAP (XTRA:SAP): Examining Current Valuation as Investor Interest Picks Up

SAP (XTRA:SAP) shares have seen some shifts lately, drawing renewed investor interest as the company’s long-term performance and recent financial momentum come under review. The stock’s year-to-date trend and annual growth rates are being closely watched.

See our latest analysis for SAP.

SAP's latest share price stands at $230.15, with recent weeks marked by a modest pickup following earnings season and product news. While short-term gains have been muted, the past year’s total shareholder return of 16% points to solid, long-term momentum that continues to build beneath the surface.

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With SAP trading about 26% below the average analyst price target, investors are left pondering whether this signals undervaluation or if the current price already reflects the company’s growth prospects. The question remains: Is there still room to buy in, or has the market priced in what’s next?

Most Popular Narrative: 7.4% Undervalued

According to Tokyo, a leading contributor, the most-followed narrative places SAP’s fair value at €248.62, which is above the latest closing price of €230.15. This price gap suggests there is still upside in the stock, at least from a long-term perspective shaped by fundamental drivers.

Over the next 5 years I calculate with (actual values from 04.05.25, price/shr at 266 EUR): Revenue Growth p.a.: 9% (Currently at 10.7%) because the last 10 years average was 6%. I estimate an extra 3% since the transition to SaaS is mainly done and gives potential for continuous price increases, which could be justified by further AI features. Profit Margin: 18% (currently at 12.3%) because the transition to cloud was very cost intensive, which kept margin during the last 3 years below 10%. Before that, SAP ranged between 15-20% profit margin. Even 20% could be reached in the long run.

Read the complete narrative.

Want to discover the key levers Tokyo expects to lift SAP’s valuation? Dive in for bold growth forecasts, margin expansion bets, and a future profit multiple you won’t see coming. Don’t miss what’s fueling this upside projection!

Result: Fair Value of €248.62 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, unexpected delays in cloud adoption or heightened competition from emerging enterprise software rivals could quickly challenge this growth outlook.

Find out about the key risks to this SAP narrative.

Build Your Own SAP Narrative

If you have a different perspective or want to dig deeper yourself, building your own SAP narrative takes just a few minutes. Give it a try: Do it your way

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding SAP.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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