Crispr Therapeutics shares tumble after significant earnings miss
SAP’s cloud backlog experienced a significant 32% growth, with nearly half of the orders involving AI use cases. The total cloud backlog expanded by 43% to €63.3 billion, providing a clear view of future revenues. Zino expects this backlog to contribute to SAP’s revenue growth through 2027. Moreover, cloud ERP sales saw a substantial 35% increase, and the recurring revenue share stood at 83%, indicating a strong shift towards recurring cloud revenue models.The analyst has also adjusted the EPS forecast for 2026 to €7.22, up from the previous estimate of €7.18, while maintaining the 2025 EPS projection at €6.15. The upward revision in the price target and EPS estimates suggests that SAP’s strategic focus on cloud and AI technologies is expected to drive its growth and profitability in the coming years. With a market capitalization of $314.78 billion and trading near its 52-week high of $277.36, SAP has demonstrated strong momentum. Get comprehensive analysis and access to SAP’s full Pro Research Report, along with detailed metrics for 1,400+ top stocks, through InvestingPro. With a market capitalization of $314.78 billion and trading near its 52-week high of $277.36, SAP has demonstrated strong momentum. Get comprehensive analysis and access to SAP’s full Pro Research Report, along with detailed metrics for 1,400+ top stocks, through InvestingPro.
In the fourth quarter, SAP reported earnings of €1.40 per share, slightly below the €1.45 consensus. Despite this, the company’s sales grew by 11%, surpassing expectations. This was attributed to a robust 27% increase in cloud growth, although it was partially offset by a 3% decrease in software licenses and support. The company’s gross margin improved, reaching 74.3% compared to 73.4% in the previous year, exceeding projections due to better cloud margins. InvestingPro data shows SAP maintains a healthy gross margin of 72.9% over the last twelve months, with 15 additional ProTips available for subscribers.
SAP’s cloud backlog experienced a significant 32% growth, with nearly half of the orders involving AI use cases. The total cloud backlog expanded by 43% to €63.3 billion, providing a clear view of future revenues. Zino expects this backlog to contribute to SAP’s revenue growth through 2027. Moreover, cloud ERP sales saw a substantial 35% increase, and the recurring revenue share stood at 83%, indicating a strong shift towards recurring cloud revenue models.
The analyst has also adjusted the EPS forecast for 2026 to €7.22, up from the previous estimate of €7.18, while maintaining the 2025 EPS projection at €6.15. The upward revision in the price target and EPS estimates suggests that SAP’s strategic focus on cloud and AI technologies is expected to drive its growth and profitability in the coming years.
In other recent news, SAP AG (NYSE:SAP) has been the subject of several significant developments. TD Cowen recently upgraded SAP’s stock rating from Hold to Buy and raised the target price to $305, forecasting operational margins to increase from 23% in 2024 to 29% in 2026. This is anticipated to support a two-year compounded annual growth rate of approximately 26% in constant currency for operating profit. However, CFRA downgraded SAP AG from Buy to Hold, citing valuation concerns despite advancements in AI and cloud technologies.
In workforce news, SAP is undergoing a significant reduction as part of its " Next (LON:NXT) Level Transformation" program, with approximately 3,500 of its 25,000 employees in Germany set to depart the company. JPMorgan maintained an overweight rating for SAP, noting the company’s solid balance sheet and a compound annual growth rate profile in the vicinity of 20%. The firm also recognized SAP’s restructuring benefits enhancing EBIT and free cash flow.
These are among the recent developments shaping SAP’s financial performance. The company’s advancements in AI and cloud technologies, workforce adjustments, and analyst upgrades and downgrades all contribute to the evolving financial landscape for SAP.
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