Executive Summary
Software Aktiengesellschaft provides software development, licensing, and maintenance; and information (IT) services worldwide.
Rewards
Risk Analysis
Earnings are forecast to decline by an average of -2.3% per year for the next 3 years
Snowflake Analysis
Flawless balance sheet and undervalued.
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
3.3%
SOW
1.5%
DE Software
0.7%
DE Market
1 Year Return
1.0%
SOW
37.4%
DE Software
15.6%
DE Market
Return vs Industry: SOW underperformed the German Software industry which returned 39.3% over the past year.
Return vs Market: SOW underperformed the German Market which returned 17.1% over the past year.
Shareholder returns
| SOW | Industry | Market | |
|---|---|---|---|
| 7 Day | 3.3% | 1.5% | 0.7% |
| 30 Day | 7.3% | 4.4% | 1.7% |
| 90 Day | 16.7% | 6.9% | 6.3% |
| 1 Year | 3.4%1.0% | 39.2%37.4% | 19.2%15.6% |
| 3 Year | n/a | 63.2%56.6% | 18.3%7.9% |
| 5 Year | n/a | 141.0%123.8% | 26.8%9.4% |
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
1 week ago | Simply Wall St
Does Software Aktiengesellschaft's (ETR:SOW) P/E Ratio Signal A Buying Opportunity?1 month ago | Simply Wall St
Was Software Aktiengesellschaft's (ETR:SOW) Earnings Growth Better Than The Industry's?2 months ago | Simply Wall St
Why You Should Like Software Aktiengesellschaft’s (ETR:SOW) ROCEValuation
Is Software undervalued compared to its fair value and its price relative to the market?
23.0%
Undervalued compared to fair value
Share Price vs. Fair Value
Below Fair Value: SOW (€32.19) is trading below our estimate of fair value (€43.15)
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 (14.2x) compared to the Software industry average (41.3x).
PE vs Market: SOW is good value based on its PE Ratio (14.2x) compared to the German market (20.6x).
Price to Earnings Growth Ratio
PEG Ratio: SOW's earnings are forecast to decline next year, so we can't calculate its PEG ratio.
Price to Book Ratio
PB vs Industry: SOW is good value based on its PB Ratio (1.8x) compared to the DE Software industry average (3.1x).
Next Steps
Future Growth
How is Software forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?
-2.8%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: SOW's earnings are forecast to decline over the next 3 years (-2.3% per year).
Earnings vs Market: SOW's earnings are forecast to decline over the next 3 years (-2.3% per year).
High Growth Earnings: SOW's earnings are forecast to decline over the next 3 years.
Revenue vs Market: SOW's revenue (3.4% per year) is forecast to grow slower than the German market (4.8% per year).
High Growth Revenue: SOW's revenue (3.4% 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 (10.7%).
Next Steps
Past Performance
How has Software performed over the past 5 years?
7.0%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: SOW has high quality earnings.
Growing Profit Margin: SOW's current net profit margins (18.7%) are higher than last year (17.5%).
Past Earnings Growth Analysis
Earnings Trend: SOW's earnings have grown by 7% per year over the past 5 years.
Accelerating Growth: SOW's earnings growth over the past year (10.7%) exceeds its 5-year average (7% per year).
Earnings vs Industry: SOW earnings growth over the past year (10.7%) underperformed the Software industry 14.6%.
Return on Equity
High ROE: SOW's Return on Equity (12.5%) is considered low.
Return on Assets
Return on Capital Employed
Next Steps
Financial Health
How is Software's financial position?
Financial Position Analysis
Short Term Liabilities: SOW's short term assets (€763.0M) exceed its short term liabilities (€486.3M).
Long Term Liabilities: SOW's short term assets (€763.0M) exceed its long term liabilities (€274.2M).
Debt to Equity History and Analysis
Debt Level: SOW's debt to equity ratio (22.4%) is considered satisfactory.
Reducing Debt: SOW's debt to equity ratio has reduced from 44.9% to 22.4% over the past 5 years.
Debt Coverage: SOW's debt is well covered by operating cash flow (61.7%).
Interest Coverage: SOW earns more interest than it pays, so coverage of interest payments is not a concern.
Balance Sheet
Inventory Level: SOW has a low level of unsold assets or inventory.
Debt Coverage by Assets: SOW's debt is covered by short term assets (assets are 2.5x debt).
Next Steps
Dividend
What is Software's current dividend yield, its reliability and sustainability?
2.14%
Current Dividend Yield
Dividend Yield vs Market
Current dividend yield vs market & industry
Notable Dividend: SOW's dividend (2.21%) is higher than the bottom 25% of dividend payers in the German market (1.38%).
High Dividend: SOW's dividend (2.21%) is low compared to the top 25% of dividend payers in the German market (3.53%).
Stability and Growth of Payments
Stable Dividend: Whilst dividend payments have been stable, SOW has been paying a dividend for less than 10 years.
Growing Dividend: SOW's dividend payments have increased, but the company has only paid a dividend for 2 years.
Current Payout to Shareholders
Dividend Coverage: With its reasonably low payout ratio (31.3%), 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 (32% payout ratio).
Next Steps
Management
What is the CEO of Software's salary, the management and board of directors tenure and is there insider trading?
1.2yrs
Average management tenure
CEO
Sanjay Brahmawar 0
1.4yrs
Tenure
€2,697,563
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 ($USD3.00M) is above average for companies of similar size in the German market ($USD2.07M).
Compensation vs Earnings: Insufficient data to compare Sanjay's compensation with company performance.
Management Age and Tenure
1.2yrs
Average Tenure
54yo
Average Age
Experienced Management: SOW's management team is not considered experienced ( 1.2 years average tenure), which suggests a new team.
Board Age and Tenure
4.7yrs
Average Tenure
55yo
Average Age
Experienced Board: SOW's board of directors are considered experienced (4.7 years average tenure).
Insider Trading
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.
Management Team
Arnd Zinnhardt (57yo)
CFO & Member of the Management Board
- Tenure: 18yrs
- Compensation: €3.66m
Otmar Winzig
Senior VP & Head of Investor Relations
Bernd Gross
Chief Technology Officer
- Tenure: 1yrs
John Schweitzer (51yo)
Chief Revenue Officer & Member of the Management Board
- Tenure: 1.2yrs
- Compensation: €1.09m
Byung-Hun Park
Senior Vice President of Corporate Communications
Stefan Sigg (54yo)
Chief Product Officer & Member of Management Board
- Tenure: 2.8yrs
- Compensation: €1.88m
Sanjay Brahmawar
Chairman of the Management Board & CEO
- Tenure: 1.4yrs
- Compensation: €2.70m
Benno Quade
Senior Vice President of Global Legal
Paz Macdonald
Chief Marketing Officer
- Tenure: 1yrs
Elke Frank
Chief Human Resources Officer & Member of Executive Board
- Tenure: 0.4yrs
Board Members
Andreas Bereczky (66yo)
Chairman of Supervisory Board
- Tenure: 10.8yrs
- Compensation: €185.20k
Markus Ziener (53yo)
Member of Supervisory Board
- Tenure: 4.7yrs
- Compensation: €74.00k
Alf Wulf (57yo)
Member of the Supervisory Board
- Tenure: 12.7yrs
- Compensation: €86.00k
Eun-Kyung Park (41yo)
Member of Supervisory Board
- Tenure: 4.7yrs
- Compensation: €78.00k
Guido Falkenberg (52yo)
Deputy Chairman of Supervisory Board
- Tenure: 4.7yrs
- Compensation: €119.00k
Christian Zimmermann (57yo)
Member of Supervisory Board
- Tenure: 4.7yrs
- Compensation: €72.00k
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: €2.460b
- 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 |
|---|---|---|---|---|---|---|
| STWR.Y | OTCPK (Pink Sheets LLC) | SPONSORED ADR | US | USD | Nov 2005 | |
| SWDA.F | OTCPK (Pink Sheets LLC) | Yes | Registered Shares | US | USD | Oct 2017 |
| SOW | DB (Deutsche Boerse AG) | Yes | Registered Shares | DE | EUR | Oct 2017 |
| SOWD | BATS-CHIXE (BATS 'Chi-X Europe') | Yes | Registered Shares | GB | EUR | Oct 2017 |
| SOW | WBAG (Wiener Boerse AG) | Yes | Registered Shares | AT | EUR | Oct 2017 |
| 0RUL | LSE (London Stock Exchange) | Yes | Registered Shares | GB | EUR | Oct 2017 |
| SOW | SWX (SIX Swiss Exchange) | Yes | Registered Shares | CH | CHF | Oct 2017 |
| SOW | XTRA (XETRA Trading Platform) | Yes | Registered Shares | DE | EUR | Oct 2017 |
| SOW-U | ETLX (Eurotlx) | Yes | Registered Shares | IT | EUR | Oct 2017 |
Biography
Software Aktiengesellschaft provides software development, licensing, and maintenance; and information (IT) services worldwide. It operates through three segments: Digital Business Platform, Adabas & Natural, and Consulting. The company offers Adabas & Natural, a transaction processing platform that enables digital enterprises to leverage core systems in various ways; Alfabet for use in IT planning and portfolio management, as well as enterprise architecture management; Apama, a platform for streaming analytics and intelligent automated actions on fast-moving big data; and Architecture for Integrated Information Systems, a platform that makes processes transparent, controlled, manageable, and agile. It also provides cloud-based platform-as-a-service suite, such as CONNX that provides secure, and real-time read/write SQL data access and integration; Cumulocity, which offers Internet of Things (IoT) connectivity for networked digital devices and sensors through a cloud-hosted IoT device management and application enablement platform; Terracotta, a platform that enables digital enterprises to access and store large volumes of data in-memory, as well as enhance system performance; webMethods, which enables customers to integrate systems, partners, data, devices, and software as a service applications; and Zementis that enables predictive analytics with artificial intelligence and machine learning capabilities. Further, the company provides digital transformation consulting, platform consulting, performance ready content, platform rapid innovation methodology, training, and support services. It offers its products and services for customers in banking and securities, communication and media, education, energy and natural resources, manufacturing, retail, transportation, healthcare, insurance, utilities, and government sectors. Software Aktiengesellschaft was founded in 1969 and is headquartered in Darmstadt, Germany.
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2020/01/21 22:22 |
| End of Day Share Price | 2020/01/21 00:00 |
| Earnings | 2019/09/30 |
| Annual Earnings | 2018/12/31 |
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.