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Investing.com - Oppenheimer has reiterated its Perform rating on SAP AG (NYSE:SAP), a $342 billion market cap software giant currently trading near its 52-week high of $313.28, following the company’s second-quarter earnings report. While results met market expectations, InvestingPro data suggests the stock is trading above its Fair Value, with a P/E ratio of 50.9x.
The enterprise software giant maintained its full-year 2025 guidance while demonstrating strong growth exceeding 30% in transitioning its large ERP installed base to its Cloud Suite, according to Oppenheimer’s analysis.
SAP showed healthy current cloud backlog trends alongside growing profitability and cash generation, which were highlighted as positive factors in the research note.
Despite these strengths, Oppenheimer noted that SAP’s results may not have surpassed investors’ high expectations, particularly with no upside to guidance and signs of deceleration across leading business indicators, reflecting elongated sales cycles and softness in transactional businesses.
The firm observed specific weakness in the U.S. Public Sector and Manufacturing industries due to macroeconomic challenges, while maintaining that SAP continues to show solid cloud growth, improving profitability, and healthy demand for the Financials modernization cycle.
In other recent news, SAP reported mixed second-quarter 2025 results, with non-IFRS earnings per share of €1.50, surpassing the consensus estimate of €1.45. The company also achieved an operating profit of €2.57 billion, exceeding the consensus of €2.42 billion. JMP Securities responded by raising its price target on SAP to $375, maintaining a Market Outperform rating due to cloud revenue growth. Meanwhile, Piper Sandler adjusted its price target on SAP to €345, citing prolonged sales cycles in the U.S. public sector and manufacturing due to trade uncertainty. However, the same firm previously raised its target to €355, highlighting strong demand for SAP’s enterprise resource planning (ERP) solutions. SAP CEO Christian Klein noted that some clients are delaying service sign-ups due to uncertainty from President Trump’s tariffs, although SAP’s revenue from cloud and software services offers some protection. Additionally, Klein expressed skepticism about the need for more data centers in Europe for AI, countering Nvidia (NASDAQ:NVDA) CEO Jensen Huang’s advocacy. These developments reflect the dynamic environment SAP is navigating amid global economic challenges and evolving market demands.
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