What changed
$SAP — BUY 📊 | 6 MONTHS THESIS
🎯 latest | Rev $2.6B | EPS $2.01 vs $1.92 🟢
💡 Consensus expects a gradual cloud shift with margin pressure from transition costs. The variant view is that SAP is past the worst, with cloud gross margins expanding faster than modeled due to scale and efficiency gains, leading to a 2-3% upward revision in FY24 EPS estimates over the next two quarters.
📉 Reward/risk: 2.0:1
🏢 Business Quality: 9/10 - SAP benefits from a deep moat in mission-critical ERP, high switching costs, and a large installed base. Cloud transition strengthens recurring revenue and cross-sell potential.
📊 Valuation: fair - Trading at 19x P/E on trailing EPS (annualized), below its 5-year average of 23x.
🔮 Catalyst: Next quarterly earnings report with cloud revenue growth >25% and cloud gross margin >72%
📊 Our read: BUY. Full analysis →
https://stockduty.xyz/s/SAP0620