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SAP Poised to Grow on Higher Demand for Hybris Solutions

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Enterprise application software, SAP SE (SAP - Free Report) recently declared that the company has observed a spike in demand for implementations with multiple SAP Hybris solutions. SAP’s Customer Engagement and Commerce solutions experienced double-digit growth in cloud bookings and software revenues over the last quarter.

Improvement in SAP Hybris cloud solutions for the front office across sales, service, commerce, marketing, and revenue resulted in 40% rise in deals involving multiple SAP Hybris cloud solutions during the first half of 2017, compared with the year-ago period.

Recently, the company also entered in to a global reseller agreement with ClickSoftware. Per terms of the deal, SAP has decided to resell the ClickSoftware Field Service Edge solution as the SAP Scheduling and Resource Management application. The solution aids in intelligent decision making by enabling real-time, automated, context-based recommendations for service planning, scheduling, execution and analysis.

However, it seems that in recent quarters, dull prospects of the global IT industry, as well as flat customer spending projections have been affecting SAP’s performance. Consequently, the company’s stock has yielded a return of 4.6% in the past three months, underperforming the industry’s increase of 5.0%.

SAP’s business, which is global in nature, exposes it to political, economical and regulatory risks. Over the past few quarters, many of the company’s emerging markets have faced widespread economic slowdowns, which adversely impacted their purchasing power.  Currency fluctuations in many of its key markets are also adding to this Zacks Rank #4 (Sell) company’s woes.

However, it seems that the resiliency of its Cloud and Software business, presence of a large business network and strategic partnerships could help the company overcome the headwinds and achieve sustainable growth.

Stocks to Consider

Some better-ranked stocks from the same space are Dassault Systemes SA (DASTY - Free Report) , Xplore Technologies Corp and Intuit Inc. (INTU - Free Report) . While Dassault Systemes and Xplore Technologies  sport a Zacks Rank #1 (Strong Buy), Intuit carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Dassault Systemes has surpassed estimates in three of the trailing four quarters, with an average positive earnings surprise of 9.8%.

Xplore Technologies has outpaced estimates in the preceding four quarters, with an average earnings surprise of 102.5%.

Intuit has surpassed estimates in the trailing four quarters, with an average positive earnings surprise of 32.5%.

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