Street Calls of the Week
Investing.com - Citizens reiterated a Market Outperform rating and $375.00 price target on SAP AG (NYSE:SAP) following the company’s third-quarter 2025 financial results. According to InvestingPro data, SAP currently trades above its Fair Value, with analysts maintaining a bullish consensus recommendation of 1.53 (Strong Buy).
SAP reported non-IFRS earnings per share of €1.59, exceeding the consensus estimate of €1.49, and operating profit of €2.57 billion, above the consensus of €2.53 billion. Total revenue reached €9.08 billion, matching consensus expectations and representing 11% year-over-year growth in constant currency, down from 12% in the previous quarter. The company maintains strong financial health with an overall "GOOD" rating from InvestingPro, supported by a robust gross profit margin of 73.8%.
Cloud revenue came in at €5.29 billion, slightly below the consensus of €5.31 billion, growing 27% in constant currency compared to 28% growth in the previous quarter. Cloud ERP growth slowed to 31% in constant currency from 34% in the previous quarter.
Current cloud backlog growth also decelerated to 27% in constant currency from 28% in the previous quarter. The mixed results led to SAP shares falling approximately 1% in aftermarket trading.
The stock had increased 12% year to date prior to the earnings release, underperforming both the Russell 3000’s 14% gain and the S&P 500’s 15% increase during the same period.
In other recent news, SAP SE announced its third-quarter 2025 earnings, which did not meet analyst expectations. The company’s earnings per share (EPS) came in at €1.72, slightly below the forecast of €1.73. More notably, SAP reported a significant revenue shortfall, with figures at €9.08 billion, compared to the anticipated €10.61 billion. These results have drawn attention from investors and analysts alike. Despite the earnings miss, the company remains a focal point for market analysis. Investors are closely monitoring these developments for future implications.
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