SOW

SoftwareXTRA:SOW Stock Report

Market Cap

€3.0b

7D

-3.8%

1Y

-2.9%

Updated

16 Sep, 2021

Data

Company Financials +
SOW fundamental analysis
Snowflake Score
Valuation4/6
Future Growth4/6
Past Performance1/6
Financial Health6/6
Dividends4/6

SOW Overview

Software Aktiengesellschaft provides software development, licensing, and maintenance; and information technology (IT) services worldwide.

Software Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Software
Historical stock prices
Current Share Price€41.36
52 Week High€30.20
52 Week Low€44.00
Beta0.99
1 Month Change-3.09%
3 Month Change10.12%
1 Year Change-2.87%
3 Year Change4.18%
5 Year Change10.22%
Change since IPO382.80%

Recent News & Updates

Shareholder Returns

SOWDE SoftwareDE Market
7D-3.8%-0.3%-0.8%
1Y-2.9%-6.5%22.4%

Return vs Industry: SOW exceeded the German Software industry which returned -7.1% over the past year.

Return vs Market: SOW underperformed the German Market which returned 22.5% over the past year.

Price Volatility

Is SOW's price volatile compared to industry and market?
SOW volatility
SOW Beta0.99
Industry Beta0.94
Market Beta1

Stable Share Price: SOW is less volatile than 75% of German stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: SOW's weekly volatility (3%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19694,696Sanjay Brahmawarhttps://www.softwareag.com

Software Aktiengesellschaft provides software development, licensing, and maintenance; and information technology (IT) services worldwide. It operates through three segments: Digital Business Platform, Adabas & Natural, and Professional Services. The company offers Adabas & Natural, a transaction processing platform; Alfabet for use in IT planning and portfolio management, as well as enterprise architecture management; Apama, a platform for streaming analytics and automated actions on big data; and Architecture for Integrated Information Systems, a platform that makes processes transparent, controlled, manageable, and agile.

Valuation

Is Software undervalued compared to its fair value and its price relative to the market?

22.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SOW (€41.36) is trading below our estimate of fair value (€53.04)

Significantly Below Fair Value: SOW is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: SOW is good value based on its PE Ratio (31.5x) compared to the German Software industry average (39.9x).

PE vs Market: SOW is poor value based on its PE Ratio (31.5x) compared to the German market (23.3x).


Price to Earnings Growth Ratio

PEG Ratio: SOW is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: SOW is good value based on its PB Ratio (2.3x) compared to the DE Software industry average (4.5x).


Future Growth

How is Software forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

28.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SOW's forecast earnings growth (28.3% per year) is above the savings rate (0.01%).

Earnings vs Market: SOW's earnings (28.3% per year) are forecast to grow faster than the German market (12% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: SOW's revenue (6.9% per year) is forecast to grow faster than the German market (5.7% per year).

High Growth Revenue: SOW's revenue (6.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SOW's Return on Equity is forecast to be low in 3 years time (9.8%).


Past Performance

How has Software performed over the past 5 years?

-6.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SOW has high quality earnings.

Growing Profit Margin: SOW's current net profit margins (11.8%) are lower than last year (15%).


Past Earnings Growth Analysis

Earnings Trend: SOW's earnings have declined by 6% per year over the past 5 years.

Accelerating Growth: SOW's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SOW had negative earnings growth (-27.4%) over the past year, making it difficult to compare to the Software industry average (-4.4%).


Return on Equity

High ROE: SOW's Return on Equity (7.3%) is considered low.


Financial Health

How is Software's financial position?


Financial Position Analysis

Short Term Liabilities: SOW's short term assets (€797.0M) exceed its short term liabilities (€444.5M).

Long Term Liabilities: SOW's short term assets (€797.0M) exceed its long term liabilities (€314.3M).


Debt to Equity History and Analysis

Debt Level: SOW's debt to equity ratio (23.3%) is considered satisfactory.

Reducing Debt: SOW's debt to equity ratio has reduced from 35.2% to 23.3% over the past 5 years.

Debt Coverage: SOW's debt is well covered by operating cash flow (30.8%).

Interest Coverage: SOW earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet


Dividend

What is Software current dividend yield, its reliability and sustainability?

1.84%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: SOW's dividend (1.84%) is higher than the bottom 25% of dividend payers in the German market (0.97%).

High Dividend: SOW's dividend (1.84%) is low compared to the top 25% of dividend payers in the German market (3.16%).


Stability and Growth of Payments

Stable Dividend: SOW's dividend payments have been volatile in the past 10 years.

Growing Dividend: SOW's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (57.9%), SOW's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SOW's dividends in 3 years are forecast to be well covered by earnings (39.2% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.4yrs

Average management tenure


CEO

Sanjay Brahmawar (51 yo)

3.08yrs

Tenure

€5,393,453

Compensation

Mr. Sanjay Brahmawar has been Chief Executive Officer and Chairman of the Management Board of Software AG, Inc. and Software Aktiengesellschaft since August 1, 2018. Mr. Brahmawar serves as General Manager...


CEO Compensation Analysis

Compensation vs Market: Sanjay's total compensation ($USD6.35M) is above average for companies of similar size in the German market ($USD2.10M).

Compensation vs Earnings: Sanjay's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

Experienced Management: SOW's management team is considered experienced (2.4 years average tenure).


Board Members

Experienced Board: SOW's board of directors are not considered experienced ( 1.7 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Software Aktiengesellschaft's employee growth, exchange listings and data sources


Key Information

  • Name: Software Aktiengesellschaft
  • Ticker: SOW
  • Exchange: XTRA
  • Founded: 1969
  • Industry: Systems Software
  • Sector: Software
  • Market Cap: €3.049b
  • Shares outstanding: 73.98m
  • Website: https://www.softwareag.com

Number of Employees


Location

  • Software Aktiengesellschaft
  • Uhlandstrasse 12
  • Darmstadt
  • Hessen
  • 64297
  • Germany

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/09/16 21:28
End of Day Share Price2021/09/16 00:00
Earnings2021/06/30
Annual Earnings2020/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.