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SAP SE (SAP) Adds 0.3% Ahead of Earnings: What To Watch
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Shares of SAP SE (SAP - Free Report) added 0.3% during regular hours Wednesday, the last day of trading before it releases its latest quarterly earnings report. Investors displayed excitement ahead of the report, and this is certainly a stock to watch once the full results are in.
SAP has positioned itself as a strong player in the cloud and software industries, and its business in the sectors accounted for about 83% of its first-quarter revenues. The Walldorf, Germany-based firm has continued to expand its presence in the EMEA (Europe, Middle East, and Africa) region and boost topline growth through its human capital management applications. Still, competition in the IT services industry is stiff, and the company’s presence abroad leaves it vulnerable to macroeconomic headwinds. Therefore investor eyes will be on Wednesday’s report as an indicator of recent progress and overall health.
According to our latest Zacks Consensus Estimates, analysts expect SAP SE to report earnings of $1.18 per share on $7.11 billion in revenue. These results would mark year-over-year growth rates of 14.6% and 11.8%, respectively.
Investors should also note that SAP’s consensus earnings estimates were trending higher in recent months, but recent negative revisions have dragged the stock back down to a Zacks Rank #3 (Hold). A downward revision for the current quarter has caused the Zacks Consensus Estimate to tick one cent lower in the past 30 days. Revisions for the current quarter, current fiscal year, and following fiscal year have since been negative across the board.
Looking at share price performance, SAP has added about 16.2% over the past year. The stock has also seen solid performance as of late, adding 9.1% on a year-to-date basis. More recently, shares have added about 12.5% over the trailing 12 weeks.
A strong earnings beat might be what SAP needs to continue its bullish surge and ease recent concerns. To gauge how likely the company is to outperform estimates tomorrow morning, we can turn to our exclusive Earnings ESP figure.
Zacks Earnings ESP (Expected Surprise Prediction) compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter. The Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change.
This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.
A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.
SAP currently has a flat Earnings ESP of 0%. This, combined with its Zacks Rank, leave us inconclusive about its chances at beating earnings estimates on Wednesday. Still, it is worth noting that SAP has notched 6 quarters of earnings outperformance in a row.
Make sure to check back here for our full analysis once SAP SE reports!
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SAP SE (SAP) Adds 0.3% Ahead of Earnings: What To Watch
Shares of SAP SE (SAP - Free Report) added 0.3% during regular hours Wednesday, the last day of trading before it releases its latest quarterly earnings report. Investors displayed excitement ahead of the report, and this is certainly a stock to watch once the full results are in.
SAP has positioned itself as a strong player in the cloud and software industries, and its business in the sectors accounted for about 83% of its first-quarter revenues. The Walldorf, Germany-based firm has continued to expand its presence in the EMEA (Europe, Middle East, and Africa) region and boost topline growth through its human capital management applications. Still, competition in the IT services industry is stiff, and the company’s presence abroad leaves it vulnerable to macroeconomic headwinds. Therefore investor eyes will be on Wednesday’s report as an indicator of recent progress and overall health.
According to our latest Zacks Consensus Estimates, analysts expect SAP SE to report earnings of $1.18 per share on $7.11 billion in revenue. These results would mark year-over-year growth rates of 14.6% and 11.8%, respectively.
Investors should also note that SAP’s consensus earnings estimates were trending higher in recent months, but recent negative revisions have dragged the stock back down to a Zacks Rank #3 (Hold). A downward revision for the current quarter has caused the Zacks Consensus Estimate to tick one cent lower in the past 30 days. Revisions for the current quarter, current fiscal year, and following fiscal year have since been negative across the board.
Looking at share price performance, SAP has added about 16.2% over the past year. The stock has also seen solid performance as of late, adding 9.1% on a year-to-date basis. More recently, shares have added about 12.5% over the trailing 12 weeks.
A strong earnings beat might be what SAP needs to continue its bullish surge and ease recent concerns. To gauge how likely the company is to outperform estimates tomorrow morning, we can turn to our exclusive Earnings ESP figure.
Zacks Earnings ESP (Expected Surprise Prediction) compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter. The Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change.
This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.
A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.
SAP currently has a flat Earnings ESP of 0%. This, combined with its Zacks Rank, leave us inconclusive about its chances at beating earnings estimates on Wednesday. Still, it is worth noting that SAP has notched 6 quarters of earnings outperformance in a row.
Make sure to check back here for our full analysis once SAP SE reports!
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>