Upside to SAP from Slower Decline in ERP & CRM Market Share

-20.98%
Downside
195
Market
154
Trefis
SAP: SAP logo
SAP
SAP

Trefis members have created forecasts for two key drivers of SAP’s (NYSE:SAP) stock over the last week: (1) SAP Market Share in Resource Planning Software and (2) SAP Market Share in Customer Relationship Software. Their forecast suggests that SAP’s Market Share in Enterprise Resource Planning (ERP) Software as well as Customer Relationship Management (CRM) Software will trend higher than Trefis forecast. These projections suggest a combined upside of nearly 7-8% for SAP’s stock.

Resource Planning Software and Customer Relationship Software are the two most important divisions, constituting 40% and 15%, respectively, of the $50 Trefis price estimate for SAP’s stock. SAP’s gain in market share in ERP and CRM, as suggested by Trefis members, would come at the expense of competitors Oracle (NASDAQ:ORCL) and Microsoft (NASDAQ:MSFT).

Considering the importance of both ERP and CRM businesses, SAP’s stock is quite sensitive to (1) SAP Market Share in Resource Planning Software and (2) SAP Market Share in Customer Relationship Software. Below are charts showing recent estimates created by Trefis members for the two drivers.

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1. SAP Market Share in Resource Planning Software

The average of forecasts for SAP Market Share in Resource Planning Software created by Trefis members indicated share to remain roughly flat at 27% over  Trefis forecast period, compared to the baseline Trefis estimate of a decrease from about 26% in 2010 to about 24% by the end of the Trefis forecast period. The member estimates imply an upside of 5% to the Trefis price estimate for SAP’s stock. In the past, SAP Market Share in Resource Planning Software has decreased from 29% in 2005 to 26% in 2009.

You can drag the forecast trend-line above to express your own view, and see the sensitivity of SAP’s stock to SAP Market Share in Resource Planning Software.

Our complete analysis for SAP Market Share in Resource Planning Software is here.

2. SAP Market Share in Customer Relationship Software

The average of forecasts for SAP Market Share in Customer Relationship Software created by Trefis members indicate that the share will remain in the range of 22-23% over the Trefis forecast period, compared to the baseline Trefis estimate of a decrease from 22% in 2010 to 19% by the end of the Trefis forecast period. The member estimates imply an upside of 3% to the Trefis price estimate for SAP’s stock. In the past, SAP Market Share in Customer Relationship Software has decreased from 26% in 2005 to 22% in 2009.

You can drag the forecast trend-line above to express your own view, and see the sensitivity of SAP’s stock to SAP Market Share in Customer Relationship Software.

Our complete analysis for SAP’s stock is here.