SAP
SAP SE
$215.11
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 43.9% above fair value
You pay
$215.11
Bear
$125.18
Fair
$149.53
Bull
$173.87
Bear
$125.18
-41.8%
$6.95 × 18x P/E
Fair
$149.53
-30.5%
$6.95 × 22x P/E
Bull
$173.87
-19.2%
$6.95 × 25x P/E
Adjust Assumptions
21.5x
6.95$
Key Value Driver
Normalized P/E multiple (22x base case)
Implied Market Multiple
30.9x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (43 analysts)
$228.00
Divergence from AlphaVal
34%
Summary
Applying a 22x P/E to adjusted EPS of $6.95, the base-case value is $149.53 per share.
Warnings
The company pays out 147% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Wall Street's average price target is $228.00 (from 43 analysts). Our estimate is 34% below the consensus -- consider that gap carefully.
Financial statements were converted from EUR into USD using EURUSD at 1.1610 USD per EUR.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples