Intrinsic value of SAP ADR - SAP

Previous Close

$113.25

  Intrinsic Value

$4,460

stock screener

  Rating & Target

str. buy

+999%

Previous close

$113.25

 
Intrinsic value

$4,460

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of SAP stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 6.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  45.80
  41.72
  38.05
  34.74
  31.77
  29.09
  26.68
  24.51
  22.56
  20.81
  19.23
  17.80
  16.52
  15.37
  14.33
  13.40
  12.56
  11.80
  11.12
  10.51
  9.96
  9.46
  9.02
  8.62
  8.25
  7.93
  7.64
  7.37
  7.14
  6.92
Revenue, $m
  49,367
  69,963
  96,583
  130,139
  171,482
  221,370
  280,438
  349,186
  427,973
  517,020
  616,423
  726,167
  846,153
  976,213
  1,116,141
  1,265,708
  1,424,685
  1,592,859
  1,770,047
  1,956,105
  2,150,939
  2,354,510
  2,566,837
  2,787,997
  3,018,132
  3,257,440
  3,506,182
  3,764,676
  4,033,295
  4,312,469
Variable operating expenses, $m
  36,114
  49,721
  67,308
  89,478
  116,793
  149,752
  188,777
  234,197
  286,249
  345,080
  407,255
  479,760
  559,031
  644,959
  737,406
  836,221
  941,253
  1,052,361
  1,169,424
  1,292,348
  1,421,070
  1,555,564
  1,695,843
  1,841,958
  1,994,002
  2,152,107
  2,316,445
  2,487,225
  2,664,695
  2,849,138
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  36,114
  49,721
  67,308
  89,478
  116,793
  149,752
  188,777
  234,197
  286,249
  345,080
  407,255
  479,760
  559,031
  644,959
  737,406
  836,221
  941,253
  1,052,361
  1,169,424
  1,292,348
  1,421,070
  1,555,564
  1,695,843
  1,841,958
  1,994,002
  2,152,107
  2,316,445
  2,487,225
  2,664,695
  2,849,138
Operating income, $m
  13,253
  20,242
  29,274
  40,661
  54,690
  71,618
  91,661
  114,989
  141,724
  171,940
  209,168
  246,407
  287,121
  331,254
  378,735
  429,487
  483,432
  540,498
  600,622
  663,756
  729,869
  798,946
  870,994
  946,039
  1,024,130
  1,105,333
  1,189,738
  1,277,451
  1,368,601
  1,463,331
EBITDA, $m
  18,222
  25,825
  35,650
  48,036
  63,297
  81,712
  103,514
  128,891
  157,972
  190,841
  227,532
  268,041
  312,330
  360,337
  411,987
  467,195
  525,876
  587,952
  653,355
  722,032
  793,949
  869,090
  947,464
  1,029,098
  1,114,045
  1,202,378
  1,294,193
  1,389,607
  1,488,759
  1,591,807
Interest expense (income), $m
  201
  695
  1,516
  2,606
  4,014
  5,789
  7,976
  10,615
  13,740
  17,376
  21,544
  26,255
  31,513
  37,318
  43,665
  50,545
  57,947
  65,859
  74,269
  83,165
  92,538
  102,380
  112,687
  123,455
  134,687
  146,386
  158,560
  171,219
  184,377
  198,051
  212,260
Earnings before tax, $m
  12,558
  18,725
  26,669
  36,647
  48,901
  63,642
  81,046
  101,249
  124,347
  150,395
  182,913
  214,894
  249,803
  287,589
  328,190
  371,540
  417,573
  466,229
  517,457
  571,219
  627,489
  686,259
  747,538
  811,352
  877,744
  946,773
  1,018,519
  1,093,074
  1,170,550
  1,251,071
Tax expense, $m
  3,391
  5,056
  7,200
  9,895
  13,203
  17,183
  21,882
  27,337
  33,574
  40,607
  49,387
  58,021
  67,447
  77,649
  88,611
  100,316
  112,745
  125,882
  139,713
  154,229
  169,422
  185,290
  201,835
  219,065
  236,991
  255,629
  275,000
  295,130
  316,048
  337,789
Net income, $m
  9,168
  13,669
  19,468
  26,752
  35,697
  46,459
  59,164
  73,912
  90,773
  109,789
  133,527
  156,873
  182,356
  209,940
  239,579
  271,224
  304,828
  340,347
  377,744
  416,990
  458,067
  500,969
  545,703
  592,287
  640,753
  691,144
  743,519
  797,944
  854,501
  913,282

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  89,433
  126,745
  174,969
  235,759
  310,657
  401,033
  508,039
  632,583
  775,313
  936,630
  1,116,708
  1,315,520
  1,532,886
  1,768,503
  2,021,995
  2,292,950
  2,580,951
  2,885,614
  3,206,606
  3,543,668
  3,896,629
  4,265,417
  4,650,067
  5,050,720
  5,467,630
  5,901,160
  6,351,780
  6,820,065
  7,306,694
  7,812,444
Adjusted assets (=assets-cash), $m
  89,433
  126,745
  174,969
  235,759
  310,657
  401,033
  508,039
  632,583
  775,313
  936,630
  1,116,708
  1,315,520
  1,532,886
  1,768,503
  2,021,995
  2,292,950
  2,580,951
  2,885,614
  3,206,606
  3,543,668
  3,896,629
  4,265,417
  4,650,067
  5,050,720
  5,467,630
  5,901,160
  6,351,780
  6,820,065
  7,306,694
  7,812,444
Revenue / Adjusted assets
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
Average production assets, $m
  28,238
  40,019
  55,245
  74,439
  98,088
  126,624
  160,410
  199,734
  244,800
  295,735
  352,594
  415,368
  483,999
  558,394
  638,433
  723,985
  814,920
  911,115
  1,012,467
  1,118,892
  1,230,337
  1,346,780
  1,468,231
  1,594,735
  1,726,371
  1,863,256
  2,005,536
  2,153,395
  2,307,045
  2,466,732
Working capital, $m
  -5,134
  -7,276
  -10,045
  -13,534
  -17,834
  -23,022
  -29,166
  -36,315
  -44,509
  -53,770
  -64,108
  -75,521
  -88,000
  -101,526
  -116,079
  -131,634
  -148,167
  -165,657
  -184,085
  -203,435
  -223,698
  -244,869
  -266,951
  -289,952
  -313,886
  -338,774
  -364,643
  -391,526
  -419,463
  -448,497
Total debt, $m
  20,773
  35,698
  54,988
  79,303
  109,263
  145,413
  188,216
  238,033
  295,125
  359,652
  431,683
  511,208
  598,154
  692,401
  793,798
  902,180
  1,017,381
  1,139,246
  1,267,642
  1,402,467
  1,543,651
  1,691,167
  1,845,027
  2,005,288
  2,172,052
  2,345,464
  2,525,712
  2,713,026
  2,907,678
  3,109,978
Total liabilities, $m
  35,773
  50,698
  69,988
  94,303
  124,263
  160,413
  203,216
  253,033
  310,125
  374,652
  446,683
  526,208
  613,154
  707,401
  808,798
  917,180
  1,032,381
  1,154,246
  1,282,642
  1,417,467
  1,558,651
  1,706,167
  1,860,027
  2,020,288
  2,187,052
  2,360,464
  2,540,712
  2,728,026
  2,922,678
  3,124,978
Total equity, $m
  53,660
  76,047
  104,981
  141,455
  186,394
  240,620
  304,824
  379,550
  465,188
  561,978
  670,025
  789,312
  919,731
  1,061,102
  1,213,197
  1,375,770
  1,548,571
  1,731,369
  1,923,964
  2,126,201
  2,337,977
  2,559,250
  2,790,040
  3,030,432
  3,280,578
  3,540,696
  3,811,068
  4,092,039
  4,384,017
  4,687,467
Total liabilities and equity, $m
  89,433
  126,745
  174,969
  235,758
  310,657
  401,033
  508,040
  632,583
  775,313
  936,630
  1,116,708
  1,315,520
  1,532,885
  1,768,503
  2,021,995
  2,292,950
  2,580,952
  2,885,615
  3,206,606
  3,543,668
  3,896,628
  4,265,417
  4,650,067
  5,050,720
  5,467,630
  5,901,160
  6,351,780
  6,820,065
  7,306,695
  7,812,445
Debt-to-equity ratio
  0.390
  0.470
  0.520
  0.560
  0.590
  0.600
  0.620
  0.630
  0.630
  0.640
  0.640
  0.650
  0.650
  0.650
  0.650
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
  0.660
Adjusted equity ratio
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  9,168
  13,669
  19,468
  26,752
  35,697
  46,459
  59,164
  73,912
  90,773
  109,789
  133,527
  156,873
  182,356
  209,940
  239,579
  271,224
  304,828
  340,347
  377,744
  416,990
  458,067
  500,969
  545,703
  592,287
  640,753
  691,144
  743,519
  797,944
  854,501
  913,282
Depreciation, amort., depletion, $m
  4,969
  5,583
  6,376
  7,376
  8,607
  10,094
  11,853
  13,901
  16,249
  18,901
  18,364
  21,634
  25,208
  29,083
  33,252
  37,708
  42,444
  47,454
  52,733
  58,276
  64,080
  70,145
  76,470
  83,059
  89,915
  97,045
  104,455
  112,156
  120,159
  128,476
Funds from operations, $m
  14,137
  19,252
  25,844
  34,128
  44,305
  56,552
  71,017
  87,813
  107,022
  128,690
  151,891
  178,507
  207,565
  239,023
  272,830
  308,932
  347,272
  387,801
  430,476
  475,265
  522,147
  571,114
  622,173
  675,346
  730,668
  788,189
  847,974
  910,100
  974,660
  1,041,757
Change in working capital, $m
  -1,613
  -2,142
  -2,768
  -3,490
  -4,300
  -5,188
  -6,143
  -7,150
  -8,194
  -9,261
  -10,338
  -11,413
  -12,478
  -13,526
  -14,552
  -15,555
  -16,534
  -17,490
  -18,427
  -19,350
  -20,263
  -21,171
  -22,082
  -23,001
  -23,934
  -24,888
  -25,869
  -26,883
  -27,936
  -29,034
Cash from operations, $m
  15,750
  21,394
  28,612
  37,618
  48,605
  61,740
  77,160
  94,963
  115,216
  137,951
  162,229
  189,920
  220,043
  252,549
  287,383
  324,487
  363,806
  405,291
  448,904
  494,615
  542,410
  592,285
  644,255
  698,347
  754,602
  813,077
  873,843
  936,983
  1,002,596
  1,070,792
Maintenance CAPEX, $m
  -1,009
  -1,471
  -2,084
  -2,877
  -3,877
  -5,109
  -6,595
  -8,355
  -10,403
  -12,750
  -15,403
  -18,364
  -21,634
  -25,208
  -29,083
  -33,252
  -37,708
  -42,444
  -47,454
  -52,733
  -58,276
  -64,080
  -70,145
  -76,470
  -83,059
  -89,915
  -97,045
  -104,455
  -112,156
  -120,159
New CAPEX, $m
  -8,862
  -11,781
  -15,226
  -19,194
  -23,649
  -28,536
  -33,787
  -39,324
  -45,066
  -50,935
  -56,858
  -62,774
  -68,632
  -74,395
  -80,039
  -85,552
  -90,935
  -96,196
  -101,351
  -106,425
  -111,445
  -116,443
  -121,451
  -126,504
  -131,637
  -136,884
  -142,280
  -147,858
  -153,650
  -159,687
Cash from investing activities, $m
  -9,871
  -13,252
  -17,310
  -22,071
  -27,526
  -33,645
  -40,382
  -47,679
  -55,469
  -63,685
  -72,261
  -81,138
  -90,266
  -99,603
  -109,122
  -118,804
  -128,643
  -138,640
  -148,805
  -159,158
  -169,721
  -180,523
  -191,596
  -202,974
  -214,696
  -226,799
  -239,325
  -252,313
  -265,806
  -279,846
Free cash flow, $m
  5,879
  8,143
  11,302
  15,546
  21,079
  28,096
  36,778
  47,285
  59,747
  74,266
  89,968
  108,782
  129,778
  152,946
  178,261
  205,683
  235,163
  266,652
  300,099
  335,457
  372,689
  411,763
  452,660
  495,373
  539,906
  586,278
  634,518
  684,670
  736,790
  790,945
Issuance/(repayment) of debt, $m
  11,256
  14,925
  19,290
  24,316
  29,959
  36,150
  42,803
  49,817
  57,092
  64,527
  72,031
  79,525
  86,946
  94,247
  101,397
  108,382
  115,201
  121,865
  128,397
  134,825
  141,184
  147,515
  153,860
  160,261
  166,764
  173,412
  180,248
  187,314
  194,652
  202,300
Issuance/(repurchase) of shares, $m
  7,677
  8,717
  9,466
  9,722
  9,241
  7,767
  5,040
  814
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  18,933
  23,642
  28,756
  34,038
  39,200
  43,917
  47,843
  50,631
  57,092
  64,527
  72,031
  79,525
  86,946
  94,247
  101,397
  108,382
  115,201
  121,865
  128,397
  134,825
  141,184
  147,515
  153,860
  160,261
  166,764
  173,412
  180,248
  187,314
  194,652
  202,300
Total cash flow (excl. dividends), $m
  24,812
  31,785
  40,058
  49,584
  60,279
  72,014
  84,621
  97,916
  116,839
  138,793
  161,999
  188,307
  216,724
  247,193
  279,658
  314,065
  350,364
  388,517
  428,495
  470,282
  513,873
  559,278
  606,520
  655,634
  706,670
  759,689
  814,766
  871,984
  931,442
  993,245
Retained Cash Flow (-), $m
  -16,845
  -22,387
  -28,934
  -36,474
  -44,939
  -54,226
  -64,204
  -74,726
  -85,638
  -96,790
  -108,046
  -119,288
  -130,419
  -141,370
  -152,095
  -162,573
  -172,801
  -182,798
  -192,595
  -202,237
  -211,777
  -221,273
  -230,790
  -240,392
  -250,146
  -260,118
  -270,372
  -280,971
  -291,978
  -303,450
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  7,967
  9,398
  11,123
  13,110
  15,341
  17,788
  20,417
  23,190
  31,201
  42,002
  53,952
  69,019
  86,305
  105,823
  127,563
  151,492
  177,563
  205,719
  235,900
  268,045
  302,096
  338,005
  375,730
  415,242
  456,524
  499,572
  544,394
  591,013
  639,464
  689,795
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  7,638
  8,603
  9,680
  10,795
  11,891
  12,909
  13,794
  14,494
  17,923
  22,020
  25,621
  29,453
  32,815
  35,527
  37,450
  38,497
  38,635
  37,885
  36,322
  34,060
  31,247
  28,046
  24,626
  21,149
  17,759
  14,575
  11,684
  9,144
  6,980
  5,194
Current shareholders' claim on cash, %
  77.0
  62.5
  53.1
  46.9
  42.9
  40.5
  39.3
  39.2
  39.2
  39.2
  39.2
  39.2
  39.2
  39.2
  39.2
  39.2
  39.2
  39.2
  39.2
  39.2
  39.2
  39.2
  39.2
  39.2
  39.2
  39.2
  39.2
  39.2
  39.2
  39.2

SAP SE (SAP) is a software and service provider. The Company offers enterprise application software. The Company operates through two segments: Applications, Technology & Services segment, and the SAP Business Network segment. The Applications, Technology & Services segment is engaged in the sale of software licenses, subscriptions to its cloud applications, and related services (primarily support services and various professional services, and support services, as well as implementation services of its software products and education services on the use of its products). The SAP Business Network segment includes its cloud-based collaborative business networks and services relating to the SAP Business Network (including cloud applications, professional services and education services). Within the SAP Business Network segment, the Company markets and sells the cloud offerings developed by SAP Ariba, SAP Fieldglass and Concur.

FINANCIAL RATIOS  of  SAP ADR (SAP)

Valuation Ratios
P/E Ratio 35.3
Price to Sales 5.8
Price to Book 4.9
Price to Tangible Book
Price to Cash Flow 27.8
Price to Free Cash Flow 35.5
Growth Rates
Sales Growth Rate 6.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 57.4%
Cap. Spend. - 3 Yr. Gr. Rate 12.1%
Financial Strength
Quick Ratio 2
Current Ratio 0
LT Debt to Equity 24.4%
Total Debt to Equity 30.7%
Interest Coverage 27
Management Effectiveness
Return On Assets 8.8%
Ret/ On Assets - 3 Yr. Avg. 9%
Return On Total Capital 10.9%
Ret/ On T. Cap. - 3 Yr. Avg. 11.1%
Return On Equity 14.7%
Return On Equity - 3 Yr. Avg. 15.8%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 72%
Gross Margin - 3 Yr. Avg. 71.4%
EBITDA Margin 28.7%
EBITDA Margin - 3 Yr. Avg. 28.7%
Operating Margin 23.3%
Oper. Margin - 3 Yr. Avg. 22.8%
Pre-Tax Margin 22%
Pre-Tax Margin - 3 Yr. Avg. 22%
Net Profit Margin 16.5%
Net Profit Margin - 3 Yr. Avg. 16.6%
Effective Tax Rate 25.3%
Eff/ Tax Rate - 3 Yr. Avg. 24.5%
Payout Ratio 37.8%

SAP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SAP stock intrinsic value calculation we used $33859.5438175 million for the last fiscal year's total revenue generated by SAP ADR. The default revenue input number comes from 0001 income statement of SAP ADR. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our SAP stock valuation model: a) initial revenue growth rate of 45.8% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for SAP is calculated based on our internal credit rating of SAP ADR, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of SAP ADR.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of SAP stock the variable cost ratio is equal to 76.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for SAP stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 7.3% for SAP ADR.

Corporate tax rate of 27% is the nominal tax rate for SAP ADR. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the SAP stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for SAP are equal to 57.2%.

Life of production assets of 19.2 years is the average useful life of capital assets used in SAP ADR operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for SAP is equal to -10.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $36815.1260504 million for SAP ADR - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 59.478 million for SAP ADR is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of SAP ADR at the current share price and the inputted number of shares is $6.7 billion.

RELATED COMPANIES Price Int.Val. Rating
ADBE Adobe Systems 238.01 239.44  hold
ORCL Oracle 47.12 34.20  sell
IBM International 141.13 191.80  buy
MSFT Microsoft 107.60 189.75  str.buy
HPE Hewlett Packar 15.34 72.67  str.buy
WDAY Workday 127.00 122.79  hold
RHT Red Hat 123.54 178.63  buy

COMPANY NEWS

▶ Adobe Stock Is Floating in the Sunny Skies of the Cloud   [Oct-16-18 10:13AM  InvestorPlace]
▶ SAP® Sales Cloud Brings Intelligent CRM to Customers   [Oct-09-18 11:00AM  PR Newswire]
▶ CNBC Transcript: Bill McDermott, CEO, SAP   [Sep-28-18 05:59AM  CNBC]
▶ Lockheed's Orlando Innovation Center to pull in new defense work, more jobs   [Sep-27-18 09:30AM  American City Business Journals]
▶ Pandora founder weighs in on SiriusXM's buyout   [Sep-26-18 07:29PM  CNBC Videos]
▶ SAP, Microsoft and Adobe announce data alliance   [Sep-24-18 09:34AM  Reuters]
▶ Do Institutions Own Shares In SAP SE (FRA:SAP)?   [03:43AM  Simply Wall St.]
▶ SAP Investor Presentation in September 2018   [Aug-31-18 09:17AM  PR Newswire]
▶ [$$] SAP Bets Machine Learning Can Make Workplace More Transparent   [Aug-30-18 04:08PM  The Wall Street Journal]
▶ SAP Ariba Announces Datacenters in Middle East   [Aug-27-18 08:30AM  Business Wire]
▶ Before Investing In SAP SE (FRA:SAP), Consider This   [Aug-24-18 03:37AM  Simply Wall St.]
▶ Accel-KKR buys majority stake in SugarCRM with 9-figure investment   [Aug-15-18 12:00PM  American City Business Journals]
▶ Who are ADP's Main Competitors?   [10:53AM  Investopedia]
▶ [$$] Editor's News Picks   [Jul-25-18 06:07PM  The Wall Street Journal]
▶ Nufarm Plants Seeds for a Better Tomorrow With SAP Ariba   [Jul-23-18 07:00PM  Business Wire]
▶ SAP: 2Q Earnings Snapshot   [05:03AM  Associated Press]
▶ SAP Cloud Business Soars   [01:01AM  PR Newswire]
▶ Preview: SAP's Earnings   [04:28PM  Benzinga]
▶ Davis-based Engage3 taps merger and IPO veteran as CFO   [Jul-13-18 06:02PM  American City Business Journals]
▶ SAPs new Silicon Valley leader on its local growth, new focus on startups, and more   [Jul-11-18 09:49AM  American City Business Journals]

CONTACT US       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.