XTRA:SOW

Stock Analysis Report

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Executive Summary

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


Snowflake Analysis

Flawless balance sheet average dividend payer.


Similar Companies

Share Price & News

How has Software's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SOW has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-4.4%

SOW

-2.3%

DE Software

-1.6%

DE Market


1 Year Return

33.6%

SOW

15.0%

DE Software

2.6%

DE Market

Return vs Industry: SOW exceeded the German Software industry which returned 19% over the past year.

Return vs Market: SOW exceeded the German Market which returned 3.9% over the past year.


Shareholder returns

SOWIndustryMarket
7 Day-4.4%-2.3%-1.6%
30 Day-14.8%-2.8%-0.9%
90 Day-4.2%-6.5%-1.1%
1 Year36.5%33.6%16.5%15.0%5.8%2.6%
3 Year-12.6%-17.8%43.3%37.4%2.8%-6.2%
5 Year54.6%41.1%104.0%90.0%23.8%6.1%

Price Volatility Vs. Market

How volatile is Software's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

20x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SOW (€36.18) is trading above our estimate of fair value (€28.75)

Significantly Below Fair Value: SOW is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: SOW is good value based on its PE Ratio (20x) compared to the DE Software industry average (30.4x).

PE vs Market: SOW is good value based on its PE Ratio (20x) compared to the German market (22.7x).


Price to Earnings Growth Ratio

PEG Ratio: SOW is poor value based on its PEG Ratio (2.1x)


Price to Book Ratio

PB vs Industry: SOW is good value based on its PB Ratio (1.9x) compared to the DE Software industry average (3.5x).


Next Steps

Future Growth

How is Software forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

9.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SOW's forecast earnings growth (9.5% per year) is above the savings rate (0.2%).

Earnings vs Market: SOW's earnings (9.5% per year) are forecast to grow slower than the German market (26.9% per year).

High Growth Earnings: SOW's earnings are forecast to grow, but not significantly.

Revenue vs Market: SOW's revenue (2.5% per year) is forecast to grow slower than the German market (6.1% per year).

High Growth Revenue: SOW's revenue (2.5% 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 (9.4%).


Next Steps

Past Performance

How has Software performed over the past 5 years?

2.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SOW has high quality earnings.

Growing Profit Margin: SOW's current net profit margins (15%) are lower than last year (18.3%).


Past Earnings Growth Analysis

Earnings Trend: SOW's earnings have grown by 2.9% 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 (-17.5%) over the past year, making it difficult to compare to the Software industry average (37.9%).


Return on Equity

High ROE: SOW's Return on Equity (9.7%) is considered low.


Next Steps

Financial Health

How is Software's financial position?


Financial Position Analysis

Short Term Liabilities: SOW's short term assets (€743.0M) exceed its short term liabilities (€399.4M).

Long Term Liabilities: SOW's short term assets (€743.0M) exceed its long term liabilities (€280.3M).


Debt to Equity History and Analysis

Debt Level: SOW's debt to equity ratio (13.3%) is considered satisfactory.

Reducing Debt: SOW's debt to equity ratio has reduced from 41.4% to 13.3% over the past 5 years.

Debt Coverage: SOW's debt is well covered by operating cash flow (91.4%).

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


Balance Sheet


Next Steps

Dividend

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

2.10%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: SOW's dividend (2.1%) is higher than the bottom 25% of dividend payers in the German market (1.18%).

High Dividend: SOW's dividend (2.1%) is low compared to the top 25% of dividend payers in the German market (3.71%).


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 reasonably low payout ratio (42%), SOW's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SOW's dividends in 3 years are forecast to be well covered by earnings (37.7% payout ratio).


Next Steps

Management

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

1.8yrs

Average management tenure


CEO

Sanjay Brahmawar (50 yo)

2.17yrs

Tenure

€4,384,460

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 ($USD5.16M) is above average for companies of similar size in the German market ($USD2.46M).

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

NamePositionTenureCompensationOwnership
Sanjay Brahmawar
Chairman of the Management Board & CEO2.17yrs€4.38mno data
Stefan Sigg
Chief Product Officer & Member of Management Board3.5yrs€1.81mno data
John Schweitzer
Chief Revenue Officer & Member of the Management Board1.92yrs€2.74mno data
Matthias Heiden
CFO & Member of Executive Board0.58yrno datano data
Elke Frank
Chief Human Resources Officer & Member of Management Board1.17yrsno datano data
Bernd Gross
Chief Technology Officer1.75yrsno datano data
Otmar Winzig
Senior VP & Head of Investor Relationsno datano datano data
Martin Clemm
Senior Vice President of Global Legal & General Counselno datano datano data
Byung-Hun Park
Senior Vice President of Corporate Communicationsno datano datano data
Paz Macdonald
Chief Marketing Officer1.75yrsno datano data
Vijay Jaswal
Chief Technology Officer of Middle East & Turkey Region7yrsno datano data
Frank Simon
Senior Vice President of Auditno datano datano data

1.8yrs

Average Tenure

50yo

Average Age

Experienced Management: SOW's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Ralf Dieter
Shareholder Representative Supervisory Board Member0.75yrno datano data
Karl-Heinz Streibich
Chairman of Supervisory Board0.75yr€1.39mno data
Markus Ziener
Shareholder Representative Member of Supervisory Board5.42yrs€80.00kno data
Guido Falkenberg
Employee Representative Deputy Chairman of Supervisory Board5.42yrs€117.00kno data
Christian Zimmermann
Employee Representative Member of Supervisory Board5.42yrs€70.00kno data
Ursula Soritsch-Renier
Shareholder Representative Supervisory Board Member0.75yrno datano data

3.1yrs

Average Tenure

56yo

Average Age

Experienced Board: SOW's board of directors are considered experienced (3.1 years average tenure).


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 company bio, 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: €2.677b
  • Shares outstanding: 73.98m
  • Website: https://www.softwareag.com

Number of Employees


Location

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

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SWDA.FOTCPK (Pink Sheets LLC)YesRegistered SharesUSUSDApr 1999
SOWDB (Deutsche Boerse AG)YesRegistered SharesDEEURApr 1999
SOWDBATS-CHIXE (BATS 'Chi-X Europe')YesRegistered SharesGBEURApr 1999
SOWWBAG (Wiener Boerse AG)YesRegistered SharesATEURApr 1999
0RULLSE (London Stock Exchange)YesRegistered SharesGBEURApr 1999
SOWSWX (SIX Swiss Exchange)YesRegistered SharesCHCHFApr 1999
SOWXTRA (XETRA Trading Platform)YesRegistered SharesDEEURApr 1999
SOW-UETLX (Eurotlx)YesRegistered SharesITEURApr 1999
STWR.YOTCPK (Pink Sheets LLC)SPON ADR EACH 4 REP 1 ORD NPVUSUSDNov 2005
SOWADB (Deutsche Boerse AG)SPON ADR EACH 4 REP 1 ORD NPVDEEURNov 2005

Biography

Software Aktiengesellschaft provides software development, licensing, and maintenance; and information technology (IT) services worldwide. It operates through three segments: Digital Business Platform, Ada ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/19 20:34
End of Day Share Price2020/10/19 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


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.