SAP (SAP) closed the most recent trading day at $119.22, moving -0.9% from the previous trading session. This change was narrower than the S&P 500’s 1.1% loss on the day. Meanwhile, the Dow lost 1.19%, and the Nasdaq, a tech-heavy index, lost 3.27%.
Prior to today’s trading, shares of the business software maker had gained 1.98% over the past month. This has outpaced the Computer and Technology sector’s gain of 1.45% and the S&P 500’s loss of 3.02% in that time.
Wall Street will be looking for positivity from SAP as it approaches its next earnings report date. This is expected to be April 21, 2023. On that day, SAP is projected to report earnings of $1.18 per share, which would represent year-over-year growth of 5.36%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.83 billion, down 1.35% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.63 per share and revenue of $33.9 billion. These totals would mark changes of +31.54% and +4.41%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for SAP. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. SAP is currently sporting a Zacks Rank of #3 (Hold).
Digging into valuation, SAP currently has a Forward P/E ratio of 21.35. This represents a discount compared to its industry’s average Forward P/E of 27.35.
It is also worth noting that SAP currently has a PEG ratio of 1.49. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. SAP’s industry had an average PEG ratio of 2.05 as of yesterday’s close.
The Computer – Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 89, which puts it in the top 36% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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