Is SAP a high-quality business?

AlphaMadera's AlphaQuality grade scores SAP SE on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how SAP compares to a Buffett-style quality bar.

What is SAP SE's AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to SAP based on a six-pillar quantitative model. The live page shows the composite grade plus each pillar's individual score with the underlying metrics.

What makes SAP a quality stock?

AlphaQuality looks at return on capital, free-cash-flow margins, debt-to-equity, revenue stability, dividend and buyback policy, and operating-margin trend. Stocks scoring well across all six pillars earn higher grades — the methodology favors compounders over cyclicals.

SAP - SAP SE

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $240.67 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Stable Earnings Power

AlphaQuality — archetype-weighted quantitative grade

B 74.1 / 100 composite

Composite Grade

Composite of six pillars weighted for stable earnings power businesses. Purely quantitative — no stock price or analyst input.

Profitability

Weight: 20%

C+ 59.1

5yr Avg ROIC 10.6% 63/100
Operating Margin Trend -0.09 pp/yr 50/100

Capital Efficiency

Weight: 15%

B- 64.6

5yr Avg ROE 10.7% 64/100
5yr Share-Count CAGR -0.1% 66/100

Growth Quality

Weight: 15%

B 72.7

5yr Revenue CAGR 8.1% 75/100
5yr EPS CAGR 7.1% 65/100
Revenue-Growth Years (5) 4/5 80/100

Cash Generation

Weight: 15%

A 90.2

5yr FCF Margin 17.8% 86/100
5yr FCF/NI Conversion 1.31x 95/100

Balance Sheet

Weight: 20%

A 91.3

Net Debt / EBITDA -0.14x 96/100
Interest Coverage (EBIT/Int) 8.14x 78/100
Altman Z-Score 5.69 100/100

Stability

Weight: 15%

B- 66.2

EPS Volatility (σ/μ) 0.34 51/100
Piotroski F-Score 7 78/100
Negative-Revenue Years (5) 1/5 80/100

2 of 3 gurus held; 2 trimmed; 1 full exit.

Holders: 2 -1
Avg Δ position: -36.7%
New buys: 0
Full exits: 1

Wood sold -100%
Cooperman decreased -69%
Greenblatt decreased -4%

How this is calculated

AlphaQuality grades six pillars from 0-100 and weights each by archetype:

Profitability (20%) — 5yr Avg ROIC, Operating Margin Trend
Capital Efficiency (15%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (15%) — 5yr Revenue CAGR, 5yr EPS CAGR, Revenue-Growth Years (5)
Cash Generation (15%) — 5yr FCF Margin, 5yr FCF/NI Conversion
Balance Sheet (20%) — Net Debt / EBITDA, Interest Coverage (EBIT/Int), Altman Z-Score
Stability (15%) — EPS Volatility (σ/μ), Piotroski F-Score, Negative-Revenue Years (5)

We deliberately ignore stock price, analyst targets, and consensus ratings so the grade is suitable for backtesting forward returns. A minimum of 5 fiscal years of audited statements is required; distressed and highly leveraged infrastructure businesses are declared ungradable rather than forced into a numeric score.