SAP (NYSE:SAP) is one of the largest enterprise software giants besides Oracle (NASDAQ:ORCL), Microsoft (NASDAQ:MSFT) and IBM (NYSE:IBM). Its stock has been on a roller coaster ride the past couple of weeks. While there have been a few significant announcements by SAP in that period, its stock has been moving largely in sync with the broader market sentiment. Since SAP generates a major portion of its revenues from the European region, any announcements about the current European dilemma have an amplified effect on its stock. Here are some of the major developments which could impact SAP’s stock.
Check out our complete price analysis for SAP.
SAP announced its results almost a month ago, with a 28% increase in new software sales. Right after the results, it launched the next version of its Sybase database offering, with advanced Hadoop integration and support for a MapReduce API. It is trying to go after the growing market for big data and analytics which Oracle and Microsoft have also expressed interest in.
It also launched a new version of its Business One ERP (enterprise resource planning) software, which is targeted primarily at small and medium sized businesses. It has traditionally focused on large enterprises, but is now also looking at solutions for small businesses aggressively to increase market share, by providing an easy-to-deploy solution which bundles resource planning, customer relationship management (CRM), inventory management, reporting, accounting, financial management and other functions in a single package.
SAP currently has around 29% share in the ERP market, which is expected to decrease marginally by the end of the forecast period, as the competition increases.
It also announced that it would be on three key trends – mobile, big data and cloud computing – to drive growth in the coming years. It has already expressed interest in all three with the Sybase Unwired platform, Hadoop integration for Sybase and cloud based versions of its apps. It is also looking to expand in Asia, following sales growth of almost 41% in the region last quarter.
We currently have a $63 Trefis price estimate for SAP, which implies around 8% upside to its stock price.
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