SAP Has Now Become More Attractive

May 12, 2022 3:40 AM ETSAP SE (SAP) Stock, , , , , , 24 Comments
Mirco Lysek
2.36K Followers

Summary

  • SAP has a significant growth opportunity with a projected 23.52% FCF and 28.48% net profit CAGR over the next 5 years.
  • The stock has dropped 38% from its ATH in the middle of a severe price correction.
  • The impact of exiting Russia is anticipated at €300M in revenue and €350M of non-IFRS operating profit.
  • Based on my valuation model, the stock is undervalued by 43% with a target price of $138 or €131.

Business management software (<span class='ticker-hover-wrapper'>NYSE:<a href='https://seekingalpha.com/symbol/SAP' title='SAP SE'>SAP</a></span>). ERP enterprise resources planning system concept

marchmeena29/iStock via Getty Images

Investment thesis

In my previous article SAP Has Potential, But There May Be Better Options Right Now In The Market published on February 1, 2022, I explained why in my opinion, the stock could still not be considered for both long-term and momentum

This article was written by

2.36K Followers
Independent trader, investment writer & financial analyst, with two decades of experience in the capital markets. Master's Degree in Management specialized in Finance, Strategy, and Marketing. It’s all about managing the risk: Being wrong is unavoidable, staying wrong is a choice. While I enjoy giving my opinion on long-term investment opportunities, my focus is oriented toward momentum and mid-term position trading, as I leverage my proficiency in fundamental analysis and integrate selected quantitative metrics with principles of technical analysis.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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