Discounted cash flow valuation of Sap Se

Abstract

This analysis conducts a thorough Discounted Cash Flow (DCF) valuation of SAP SE for 2024, a leader in the global enterprise software market. It has a strong financial performance, supported by significant advancements in cloud-based solutions and digital transformation. The valuation, based on detailed financial data and market projections, utilized a Weighted Average Cost of Capital (WACC) of 6.61% and a terminal growth rate of 5.01%. The analysis reveals SAP SE’s enterprise value significantly exceeds its current market capitalization, indicating the stock is undervalued. The intrinsic value of SAP’s equity is estimated at approximately €349 billion, suggesting a target stock price of €284.31 per share, a 51.11% premium over the current price of €188.14. Given the solid financial foundation and strategic market positioning, the valuation strongly supports a BUY recommendation for investors looking for growth and innovation-driven returns.