DCF Studio

    SAP.DE · GER · Technology

    SAP SE

    Also onConsensus Drift

    Implied value per share

    EUR 104.61

    Market price

    EUR 183.12

    Implied upside

    -42.9%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    NoteRisk-free rate is an assumption: EUR assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    EUR 104.61-42.9%
    Exit multiple
    EUR 194.74+6.3%
    Market price
    EUR 183.12

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    0bn5bn9bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 39.6bnEUR 42.6bnEUR 45.9bnEUR 49.4bnEUR 53.1bn+7.6%
    EBITEUR 8.8bnEUR 9.5bnEUR 10.2bnEUR 11.0bnEUR 11.8bn+7.6%
    NOPATEUR 6.2bnEUR 6.6bnEUR 7.1bnEUR 7.7bnEUR 8.3bn+7.6%
    Add depreciation & amortisationEUR 1.7bnEUR 1.8bnEUR 2.0bnEUR 2.1bnEUR 2.3bn+7.6%
    Less capital expenditureEUR -973.0mEUR -1.0bnEUR -1.1bnEUR -1.2bnEUR -1.3bn+7.6%
    Less increase in working capitalEUR -44.9mEUR -48.3mEUR -52.0mEUR -56.0mEUR -60.2m+7.6%
    Free cashflow to firmEUR 6.8bnEUR 7.3bnEUR 7.9bnEUR 8.5bnEUR 9.1bn+7.6%
    Discount factor0.96420.89640.83340.77480.7203-
    Present valueEUR 6.6bnEUR 6.6bnEUR 6.6bnEUR 6.6bnEUR 6.6bn+0.1%
    Present Value Of The ForecastEUR 32.9bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate2.60%EUR assumption - no free live source available for this market (assumption)
    Equity risk premium6.00%Market assumption
    Beta0.849Reported 0.775, pulled toward 1.0 (Blume)
    Cost of equity7.70%Risk-free + beta x equity risk premium
    Cost of debt5.43%Interest expense / average total debt
    Market capitalisationEUR 211.4bn96.6% of capital
    Total debtEUR 7.5bn3.4% of capital, book value as a proxy
    Tax rate30.0%Effective, capped at statutory
    WACC7.56%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareEUR 104.61

    73% of EV

    Forecast FCFF, final year
    EUR 9.1bn
    Capex at depreciation, working capital in reinvestment
    EUR 8.3bn
    Less reinvestment at g/ROIC (27.1% of NOPAT)
    EUR -2.2bn
    Capitalised
    EUR 6.0bn
    ROIC (reported)
    9.2%
    Terminal value, undiscounted
    EUR 121.8bn
    Terminal value, discounted
    EUR 87.7bn
    Enterprise value
    EUR 120.6bn
    Less net debt
    EUR -2.3bn
    Equity value
    EUR 122.9bn

    Exit at 19.1x EBITDA

    Value per shareEUR 194.74

    85% of EV

    Terminal value, undiscounted
    EUR 268.8bn
    Terminal value, discounted
    EUR 193.6bn
    Enterprise value
    EUR 226.5bn
    Less net debt
    EUR -2.3bn
    Equity value
    EUR 228.8bn

    Spread between methods: 60%.

    Sensitivity

    Value per share (EUR) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.56%146.48154.73165.58180.54202.62
    6.56%119.21122.99127.64133.51141.20
    7.56%100.89102.60104.61106.99109.89
    8.56%87.7288.3889.1189.9290.84
    9.56%78.1578.4078.6478.8879.13

    Outlined: this model. Green text: above today's price of 183.12. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year7.6%22.1%+14.4pp
    EBIT margin22.2%39.6%+17.4pp
    Discount rate7.6%5.2%-2.3pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.