Relative valuation of Sap Se

Abstract

This thematic paper presents SAP SE’s relative valuation for the target price in 2024. It includes a business description, macro-economic analysis, industry and competition analysis, relative valuation, assessment of investment risks, and a conclusion. The paper analyzes SAP SE’s historical valuation over the past five years using key metrics: P/E ratio, P/BV ratio, and EV/EBITDA ratio, comparing historical metrics. Additionally, SAP SE is benchmarked against peers such as ORCL, CRM, INTU, ADBE, IBM, SNPS, and CDNS, focusing on companies within the software and ERP solutions sectors that generate revenue from a subscription model. The target price is derived by averaging the trailing and forward estimates of the P/E and EV/EBITDA multiples of the peer group. As of July 12, 2024, SAP SE's market capitalization is 220.30 billion euros, with a closing price of 188.74 euros. This is above the average target price of 176.31 euros, indicating a downside potential of 6.58%. Therefore, the recommendation is to 'HOLD.'