r/valueinvesting
Is SAP SE (SAP) a value investment right now?
SAP is a strong value play due to its deep moat, recurring revenue, solid balance sheet, and implicit backing as Germany's top firm.
- Strong moat with high switching costs and deeply embedded enterprise software.
- Solid financials with recurring revenue, strong balance sheet, and consistent free cash flow.
- Implicit strategic backing as Germany's most important tech company, reducing downside risk.
I’ve been looking at SAP SE and trying to evaluate it from a value investing perspective:
\-Strong moat
\-Enterprise software deeply embedded in customers’ operations
\-Recurring revenue
\-High switching costs
\-Strong balance sheet
\-Consistent free cash flow
The stock has also pulled back from previous highs, while the underlying business still appears to be growing.
One thing that makes me more confident is that SAP is arguably Germany’s most important technology company. Germany has very few global tech champions, and SAP is a strategic national asset. I don’t mean that the government would literally bail out shareholders, but it’s hard for me to imagine Germany allowing one of its crown-jewel companies to become irrelevant.
Not above $70
No its coming down below 160 to 130-140 unless some big activity happen. It has got base at 160 with big volume.
You are talking dollars, aren't you?
It is an EU stock - my numbers are in euros
Oh sorry im talking in dollars
Intu
SAP is one of my biggest holdings in EU tech. Sticky product, additional revenue streams thanks to AI and a customer base that is migrating to the cloud. Last results were also better than expected. I’ve been buying more the last week.
I’ve been buying the dip. Several European companies rely on SAP and that’s not going to change anytime soon. I see AI more as an opportunity for the company instead of a threat.
Nah. Still expensive
It's not a matter of who is expensive. You will get only companies cheap as dirt who doesn't have strong moat and base and fall like a cards when something wrong happens. If your objective is just buying any company at cheap then thats other story but if you want to buy specific good company you might have to pay little bit premium because it won't fall like a cards like others.
You should full port into it, OP! Tell us how it's going five years from now. Looking forward to the catchup. Bye for now! 👋
I've been eyeing it for a while and the only reason I haven't built a larger position is because I refuse to catch obvious falling knives.
Better to wait for seller exhaustion. Being too early and being wrong are the same thing when you consider opportunity cost
I might agree sellers haven't exhausted fully yet but I disagree with its falling knife.
It has definitely got some base at 160. Looking at the chart big volume activity is happening recently. Sellers are selling in big volumes around 160-170 but it has been absorbed by big buyers and they aren't letting it fall below 160. Chart shows sellers have exhausted not in the 200's but atleast at 160.
Yeah falling knife might've been a bit too strong of a term in this instance. I guess a better way to describe it would be more like a decending channel. There's a strong resistance level of sellers and the share price seems to be making lower highs and lower lows. Though the trading range has contracted a bit and there does appear to be some support level around 160. My main concern is whether that level continues to hold or if it finally breaks and sends it another leg down.
But anyway yeah, I mean the fundamentals of the company are solid and I've opened a starter position at that support level. I'm not worried about the long term health of the company by any means. I just know that (for me specifically) I like to consider the opportunity cost and don't like to see capital tied up in a stock that trades sideways for a very long time. But the moment there's some sign of it breaking out out what narrow trading range, I'm prepared to load up heavily on shares because I believe it's a fantastic company
Lol just realized my reply was way longer than I had intended. TLDR for anyone reading: fantastic company to buy at these levels, particularly when the selling pressure is eventually overwhelmed by buying pressure
What I like about SAP is it's kind of black hole for its clients, once they start using SAP it's difficult to move back and choose someone else due to complexity and scale of the infra created. It's similar for the msft as well.
I have some holding, I believe they will figure out. They are too big to fail.
Greatest catalyst for SAP; the ban of fable lmao
SAP will eventually rally, and by then it may be too late to get in. AI is not going to replace SAP, but it can help the company operate more efficiently and improve productivity
I don’t know this company well. What % of their profits is from consulting? AI disruption of any is going to happen there I think. Not their main product itself.
The ceo was in a podcast with Nikolai Tangen. Great stuff.
I think them being in Germany,EU is less promising. Unless EU decides, to really push the narrative of high yielding jobs as something great and provide some tax stimulus, they will end up lagging in breakthrough.
i have been buying the dip but not too much as i want to see some seller exhaustion like with microsoft
Looking at the chart big volume activity is happening recently. Sellers are selling in big volumes around 160-170 but it has been absorbed by big buyers and they aren't letting it fall below 160. Chart shows sellers have exhausted not in the 200's but atleast at 160.
I would like to know more if I'm missing something.
La tengo en cartera y creo que es una buena oportunidad Quality-Value investing a los multiplos actuales, la ha golpeado la ola anti SaaS, pero pienso que en el mediano plazo tendera a su valor justo