Executive Summary
Software Aktiengesellschaft provides software development, licensing, and maintenance; and information technology (IT) services worldwide. More Details
Rewards
Risk Analysis
Snowflake Analysis
Flawless balance sheet, undervalued and pays a dividend.
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 is not significantly more volatile than the rest of German stocks over the past 3 months, typically moving +/- 5% a week.
Volatility Over Time: SOW's weekly volatility (5%) has been stable over the past year.
Market Performance
7 Day Return
3.0%
SOW
1.3%
DE Software
0.4%
DE Market
1 Year Return
0.3%
SOW
-10.1%
DE Software
4.9%
DE Market
Return vs Industry: SOW exceeded the German Software industry which returned -12.3% over the past year.
Return vs Market: SOW underperformed the German Market which returned 3.6% over the past year.
Shareholder returns
| SOW | Industry | Market | |
|---|---|---|---|
| 7 Day | 3.0% | 1.3% | 0.4% |
| 30 Day | 0.1% | 1.5% | 4.8% |
| 90 Day | -1.8% | -12.0% | 12.2% |
| 1 Year | 2.5%0.3% | -8.9%-10.1% | 8.2%4.9% |
| 3 Year | -17.6%-22.5% | 24.2%19.1% | 6.5%-2.8% |
| 5 Year | 19.3%8.8% | 66.4%55.0% | 45.0%24.7% |
Long-Term 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
5 months ago | Simply Wall St
Software Aktiengesellschaft's (ETR:SOW) Business Is Trailing The Market But Its Shares Aren't1 year ago | Simply Wall St
Does Software Aktiengesellschaft's (ETR:SOW) P/E Ratio Signal A Buying Opportunity?1 year ago | Simply Wall St
Was Software Aktiengesellschaft's (ETR:SOW) Earnings Growth Better Than The Industry's?Valuation
Is Software undervalued compared to its fair value and its price relative to the market?
29.3%
Undervalued compared to fair value
Share Price vs. Fair Value
Below Fair Value: SOW (€33.48) is trading below our estimate of fair value (€47.35)
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 (23.9x) compared to the DE Software industry average (27.1x).
PE vs Market: SOW is good value based on its PE Ratio (23.9x) compared to the German market (24.4x).
Price to Earnings Growth Ratio
PEG Ratio: SOW is poor value based on its PEG Ratio (2.4x)
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 (4.1x).
Next Steps
Future Growth
How is Software forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?
10.0%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: SOW's forecast earnings growth (10% per year) is above the savings rate (0.07%).
Earnings vs Market: SOW's earnings (10% per year) are forecast to grow slower than the German market (25% per year).
High Growth Earnings: SOW's earnings are forecast to grow, but not significantly.
Revenue vs Market: SOW's revenue (2.8% per year) is forecast to grow slower than the German market (6% per year).
High Growth Revenue: SOW's revenue (2.8% 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 (8.7%).
Next Steps
Past Performance
How has Software performed over the past 5 years?
0.2%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: SOW has high quality earnings.
Growing Profit Margin: SOW's current net profit margins (12.2%) are lower than last year (18.7%).
Past Earnings Growth Analysis
Earnings Trend: SOW's earnings have grown by 0.2% 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 (-38.3%) over the past year, making it difficult to compare to the Software industry average (47.2%).
Return on Equity
High ROE: SOW's Return on Equity (7.9%) is considered low.
Next Steps
Financial Health
How is Software's financial position?
Financial Position Analysis
Short Term Liabilities: SOW's short term assets (€767.0M) exceed its short term liabilities (€425.7M).
Long Term Liabilities: SOW's short term assets (€767.0M) exceed its long term liabilities (€327.9M).
Debt to Equity History and Analysis
Debt Level: SOW's debt to equity ratio (20.9%) is considered satisfactory.
Reducing Debt: SOW's debt to equity ratio has reduced from 32.3% to 20.9% over the past 5 years.
Debt Coverage: SOW's debt is well covered by operating cash flow (53.8%).
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?
2.27%
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: SOW's dividend (2.27%) is higher than the bottom 25% of dividend payers in the German market (0.97%).
High Dividend: SOW's dividend (2.27%) is low compared to the top 25% of dividend payers in the German market (3.5%).
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 (54.2%), 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 (33.9% payout ratio).
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
2.1yrs
Average management tenure
CEO
Sanjay Brahmawar (50 yo)
2.42yrs
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 ($USD5.32M) is above average for companies of similar size in the German market ($USD2.15M).
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
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| Chairman of the Management Board & CEO | 2.42yrs | €4.38m | no data | |
| Chief Product Officer & Member of Management Board | 3.75yrs | €1.81m | no data | |
| Chief Revenue Officer & Member of the Management Board | 2.17yrs | €2.74m | no data | |
| CFO & Member of Executive Board | 0.83yr | no data | no data | |
| Chief Human Resources Officer & Member of Management Board | 1.42yrs | no data | no data | |
| Chief Technology Officer | 2yrs | no data | no data | |
| Senior VP & Head of Investor Relations | no data | no data | no data | |
| Senior Vice President of Global Legal & General Counsel | no data | no data | no data | |
| Senior Vice President of Corporate Communications | no data | no data | no data | |
| Chief Marketing Officer | 2yrs | no data | no data | |
| Chief Technology Officer of Middle East & Turkey Region | 7.25yrs | no data | no data | |
| Senior Vice President of Audit | no data | no data | no data |
2.1yrs
Average Tenure
50yo
Average Age
Experienced Management: SOW's management team is considered experienced (2.1 years average tenure).
Board Members
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| Shareholder Representative Supervisory Board Member | 1yr | no data | no data | |
| Chairman of Supervisory Board | 1yr | €1.39m | no data | |
| Shareholder Representative Member of Supervisory Board | 5.67yrs | €80.00k | no data | |
| Employee Representative Deputy Chairman of Supervisory Board | 5.67yrs | €117.00k | no data | |
| Employee Representative Member of Supervisory Board | 5.67yrs | €70.00k | no data | |
| Shareholder Representative Supervisory Board Member | 1yr | no data | no data |
3.3yrs
Average Tenure
56yo
Average Age
Experienced Board: SOW's board of directors are considered experienced (3.3 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: €2.427b
- Shares outstanding: 73.98m
- Website: https://www.softwareag.com
Number of Employees
Location
- Software Aktiengesellschaft
- Uhlandstrasse 12
- Darmstadt
- Hessen
- 64297
- Germany
Listings
| Ticker | Exchange | Primary Security | Security Type | Country | Currency | Listed on |
|---|---|---|---|---|---|---|
| SWDA.F | OTCPK (Pink Sheets LLC) | Yes | Registered Shares | US | USD | Apr 1999 |
| SOW | DB (Deutsche Boerse AG) | Yes | Registered Shares | DE | EUR | Apr 1999 |
| SOWD | BATS-CHIXE (BATS 'Chi-X Europe') | Yes | Registered Shares | GB | EUR | Apr 1999 |
| SOW | WBAG (Wiener Boerse AG) | Yes | Registered Shares | AT | EUR | Apr 1999 |
| 0RUL | LSE (London Stock Exchange) | Yes | Registered Shares | GB | EUR | Apr 1999 |
| SOW | SWX (SIX Swiss Exchange) | Yes | Registered Shares | CH | CHF | Apr 1999 |
| SOW | XTRA (XETRA Trading Platform) | Yes | Registered Shares | DE | EUR | Apr 1999 |
| SOW-U | ETLX (Eurotlx) | Yes | Registered Shares | IT | EUR | Apr 1999 |
| STWR.Y | OTCPK (Pink Sheets LLC) | SPONSORED ADR | US | USD | Nov 2005 | |
| SOWA | DB (Deutsche Boerse AG) | SPONSORED ADR | DE | EUR | Nov 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
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2021/01/21 19:29 |
| End of Day Share Price | 2021/01/21 00:00 |
| Earnings | 2020/09/30 |
| Annual Earnings | 2019/12/31 |
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.