SAP stock shows mixed results as Oppenheimer maintains Perform rating

Investing.com - SAP AG (NYSE:SAP), currently trading at $276.22 with a substantial market capitalization of $314.75 billion, received a reiterated Perform rating from Oppenheimer on Thursday, following the company’s mixed third-quarter results. According to InvestingPro data, the company maintains a GOOD financial health score, supported by strong fundamentals.

Oppenheimer analyst Ray McDonough highlighted SAP’s cloud business as a positive factor, noting its strong growth and mid-70% gross margins at a large scale. This performance indicates SAP’s successful cloud transition and supports growing profitability for the company. The company’s overall gross profit margin stands at an impressive 73.8%, while revenue growth reached 10.28% in the last twelve months.

The analyst observed that SAP’s management provided upbeat commentary about demand and pipeline momentum despite macroeconomic uncertainty, though bookings continue to show back-end linearity. On the negative side, current cloud backlog growth continues decelerating this year, as implied by the company’s guidance. InvestingPro subscribers can access 12 additional key insights about SAP’s performance and outlook.

SAP made minor adjustments to its annual guidance following the quarterly results. Oppenheimer views the quarter as "good" overall, with encouraging signs of durable cloud growth, margin expansion, and improved profitability.

The firm maintained its Perform rating on SAP, citing valuation as the primary reason for not upgrading the stock despite positive business trends in the ERP/Financials modernization cycle.

In other recent news, SAP AG reported its third-quarter 2025 financial results, highlighting mixed outcomes. The company announced non-IFRS earnings per share of €1.59, surpassing the consensus estimate of €1.49, while operating profit was €2.57 billion, slightly above the €2.53 billion consensus. Total revenue reached €9.08 billion, aligning with expectations and marking an 11% year-over-year growth in constant currency. However, another report noted that SAP’s EPS was €1.72, narrowly missing the forecast of €1.73, and revenue fell short of the anticipated €10.61 billion. Citizens reiterated a Market Outperform rating on SAP, maintaining a price target of $375.00. Despite these mixed earnings results, Citizens’ rating suggests continued confidence in SAP’s market performance. These developments provide investors with varied insights into SAP’s recent financial health.

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