SAP Stock

Interested in investing in a promising asset? SAP stock may well be of interest to you. Read our comprehensive guide to everything you need to know about the company’s history, business model, IPO and listing, advantages and disadvantages.

History

SAP is a German company that develops business process management software. Founded in 1972, it was first called Systemanalyse Programmentwicklung, and later became SAP SE (System Anwendungen Produkte). 

In the beginning, the company consisted of only five people: Dietmar Hopp, Klaus Tschira, Hans-Werner Hector, Hasso Plattner, and Claus Wellenreuther. Today, it has grown into a multinational company with over 100,000 employees. Its current customers number more than 440,000 and are located in 180 countries.

The quality of its products has made the company the number one software publisher in Europe and the fourth in the world. 

Its headquarters are located in Walldorf, Germany, but the group now has offices on all continents.

Business model

SAP's business model is based on the sale of software solutions for small and medium-sized businesses and large enterprises. This activity represents 83.5% of its revenues. The standard applications, industry solutions and platforms offered by SAP SE are all designed to design business processes and to create forecasts (analysis of sales trends, machine revision forecasts, etc.). SAP SE offers solutions that can be installed on site or used from the Cloud.

In addition to selling software solutions, SAP also offers services (training and consulting) that help its customers leverage operational data from various business processes, such as online feedback and customer service requests. These services, which account for 16.5% of its revenue, help its customers find the right insights into their targets and thus improve their products and services.

Introduction and quotation of SAP shares

Currently, SAP stock is listed on the Deutsche Boerse market. It is included in the calculation of the German stock market index DAX 30. The company’s leading position is illustrated by this and the following historical data :

• In 2017, SAP reached a market capitalization with a value of 116,646.47 MEUR. In the same year, the number of shares issued by the company reached 23,000,000.
• Currently, SAP is in the list of the 30 German companies with the highest market capitalization.
• Since its inception, SAP's revenue has never stopped growing. It was 22,000,000 euros in 2016 and will increase to 27,338,000 euros in 2020.
• The company has gone through only one notable period of crisis. Between 2006 and 2009, its share price experienced a relatively significant downward trend.

Advantages and disadvantages of SAP stock

It is still difficult to say whether it is a good time to invest in SAP stock. Take a look at the following  data about factors that could positively or negatively impact SAP share prices before deciding whether to invest. 

• The effectiveness of SAP's strategy : SAP is currently in a strong financial position. If it adopts the right strategies, this advantage will allow it to strengthen its presence in its sector by investing in targeted sectors and countries.
• Expansion of product offerings : SAP has invested heavily in research and development. The results of its investments should help it gain some market share. The acquisition of several promising companies should also help it reach new heights.
• The development of competition : although SAP is currently the leader in its field, the company has to face many competitors, including the American leaders Oracle, Microsoft and IBM. A strong development of the latter could have a considerable impact on SAP's results.