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SAP (SAP) Outpaces Stock Market Gains: What You Should Know
In the latest trading session, SAP (SAP - Free Report) closed at $123.74, marking a +1.23% move from the previous day. This change outpaced the S&P 500's 0.3% gain on the day. Meanwhile, the Dow gained 0.24%, and the Nasdaq, a tech-heavy index, added 0.34%.
Prior to today's trading, shares of the business software maker had gained 6.06% over the past month. This has outpaced the Computer and Technology sector's gain of 5.82% and the S&P 500's loss of 1.21% in that time.
SAP will be looking to display strength as it nears its next earnings release, which is expected to be April 21, 2023. The company is expected to report EPS of $1.18, up 5.36% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $7.83 billion, down 1.35% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $5.63 per share and revenue of $33.9 billion, which would represent changes of +31.54% and +4.41%, respectively, from the prior year.
Any recent changes to analyst estimates for SAP should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. SAP is holding a Zacks Rank of #3 (Hold) right now.
Investors should also note SAP's current valuation metrics, including its Forward P/E ratio of 21.7. For comparison, its industry has an average Forward P/E of 26.85, which means SAP is trading at a discount to the group.
Investors should also note that SAP has a PEG ratio of 1.51 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computer - Software industry currently had an average PEG ratio of 2.03 as of yesterday's close.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 71, putting it in the top 29% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.