Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.
Operating Margin26.8%
Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.
Net Income Margin22.1%
Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.
Financial Health
B
Years to Pay Off Debt4.8 yrs
Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.
Working Capital$2.9B
Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.
Valuation
F
Margin of Safety0.0%
How far below the Graham Number the stock trades. Graham required a 33% discount as a buffer against analytical error. However, the Graham Number itself assumes 1960s-era P/E and P/B norms — for modern asset-light businesses it often understates true intrinsic value, making 0% MoS appear misleadingly bad.
Price-to-Book4.89x
Market price vs book value per share. Rarely below 1.5x for quality businesses today. Intangible assets (brand, software, patents) don't appear on the balance sheet under accounting rules, making P/B artificially high for asset-light companies like software and consumer brands.
Cash Flow
A
Free Cash Flow$3.0B
Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.
CapEx % of Net Income5.3%
Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.
Owner Earnings$2.6B
Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.
About SAP SE
SAP SE, together with its subsidiaries, provides enterprise application and business solutions worldwide. It offers SAP Business AI; SAP S/4HANA that provides software capabilities for finance, risk and project management, procurement, manufacturing, supply chain and asset management, and research and development; SAP SuccessFactors solutions for human resources, including HR, time, payroll, talent and employee experience management, and analytics and planning; and spend management solutions that covers direct and indirect spend, travel and expense, and external workforce management. The company also provides SAP customer experience solutions; SAP Business Technology platform that enables customers and partners to build, integrate, and automate applications; and SAP Business Network, a business-to-business collaboration platform that helps digitalize key business processes across the supply chain and enables communication between trading partners. In addition, it offers SAP Signavio to help customers to discover, analyze, and understand business process operations; industry solutions that provide customers and partners with industry-specific solutions; and SAP LeanIX to visualize enterprise architecture, assess interdependencies and the potential impact of IT modernization, and manage the transition toward the target landscape. Further, the company provides WalkMe to execute workflows; SAP Enable Now, which offers e-learning content embedded in SAP workflows; Taulia solutions for working capital management; and sustainability solutions and services. Additionally, it provides services and support solutions. The company has a strategic collaboration with Fresenius SE & Co. KGaA and Avelios Medical GmbH for the development of a cloud-native, hospital information system that enables digitalization of clinical and administrative processes with AI integration. SAP SE was founded in 1972 and is headquartered in Walldorf, Germany.
SAP SE, together with its subsidiaries, provides enterprise application and business solutions worldwide. It offers SAP Business AI; SAP S/4HANA that provides software capabilities for finance, risk and project management, procurement, manufacturing, supply chain and asset management, and research and development; SAP SuccessFactors solutions for human resources, including HR, time, payroll, talent and employee experience management, and analytics and planning; and spend management solutions that covers direct and indirect spend, travel and expense, and external workforce management. The company also provides SAP customer experience solutions; SAP Business Technology platform that enables customers and partners to build, integrate, and automate applications; and SAP Business Network, a business-to-business collaboration platform that helps digitalize key business processes across the supply chain and enables communication between trading partners. In addition, it offers SAP Signavio to help customers to discover, analyze, and understand business process operations; industry solutions that provide customers and partners with industry-specific solutions; and SAP LeanIX to visualize enterprise architecture, assess interdependencies and the potential impact of IT modernization, and manage the transition toward the target landscape. Further, the company provides WalkMe to execute workflows; SAP Enable Now, which offers e-learning content embedded in SAP workflows; Taulia solutions for working capital management; and sustainability solutions and services. Additionally, it provides services and support solutions. The company has a strategic collaboration with Fresenius SE & Co. KGaA and Avelios Medical GmbH for the development of a cloud-native, hospital information system that enables digitalization of clinical and administrative processes with AI integration. SAP SE was founded in 1972 and is headquartered in Walldorf, Germany.
Metric Explanations
What each dimension measures and where the thresholds come from.
Gross Profit Margin
Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.
Operating Margin
Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.
Net Income Margin
Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.
Years to Pay Off Debt
Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.
Working Capital
Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.
Margin of Safety
How far below the Graham Number the stock trades. Graham required a 33% discount as a buffer against analytical error. However, the Graham Number itself assumes 1960s-era P/E and P/B norms — for modern asset-light businesses it often understates true intrinsic value, making 0% MoS appear misleadingly bad.
Price-to-Book
Market price vs book value per share. Rarely below 1.5x for quality businesses today. Intangible assets (brand, software, patents) don't appear on the balance sheet under accounting rules, making P/B artificially high for asset-light companies like software and consumer brands.
Free Cash Flow
Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.
CapEx % of Net Income
Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.
Owner Earnings
Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.
Mr. Market is currently offering SAP SE at $189.75.
The business passes only 2 of 7 of Graham's defensive criteria — well below his required standard.
At $189.75, the stock trades at a 369% premium to its Graham Number of $40.49. Graham would consider this price speculative.
There is no margin of safety at the current price. Graham would advise patience and waiting for a better entry point.
Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign..
Conclusion: By Graham's standards, this stock is speculative at its current price. The intelligent investor would look elsewhere or wait.
Showing Key Metrics
Income Highlights
Metric
Q2 2026
Q4 2025
Q4 2024
Gross Profit %
73.2%▲
71.4%•
N/A
Operating Margin %
26.8%▲
24.2%•
N/A
Net Income %
22.1%▲
17.3%•
N/A
Diluted EPS
1.88▲
1.57•
N/A
Balance Sheet Highlights
Metric
Q2 2026
Q4 2025
Q4 2024
Total Assets
$75.6B
$70.4B
N/A
Total Debt
$10.5B▲
$7.5B•
N/A
Working Capital
$2.9B▲
$2.8B•
N/A
Years to Pay Debt
4.82
4.45
N/A
Cash Flow Highlights
Metric
Q2 2026
Q4 2025
Q4 2024
Free Cash Flow
$3.0B▲
$1.1B•
N/A
Owner Earnings
$2.6B
$2.2B
N/A
CapEx % of Net Income
5.3%
10.7%
N/A
Income Statement
2026
2025
2024
Tax Effect Of Unusual Items
-1,855
291,252
Tax Rate For Calcs
0
0
Normalized EBITDA
3,652,000
1,611,000
Total Unusual Items
-7,000
902,000
Total Unusual Items Excluding Goodwill
-7,000
902,000
Net Income From Continuing Operation Net Minority Interest
2,180,000
1,680,000
Reconciled Depreciation
316,000
325,000
Reconciled Cost Of Revenue
2,650,000
2,768,000
EBITDA
3,645,000
2,513,000
EBIT
3,329,000
2,188,000
Net Interest Income
403,000
-617,000
Interest Expense
323,000
-367,000
Interest Income
726,000
-818,000
Normalized Income
2,185,145
1,069,252
Net Income From Continuing And Discontinued Operation
2,180,000
1,680,000
Total Expenses
7,227,000
7,341,000
Total Operating Income As Reported
2,643,000
2,341,000
Diluted Average Shares
1,158,000
1,172,000
Basic Average Shares
1,153,000
1,166,000
Diluted EPS
0
0
Basic EPS
0
0
Diluted NI Availto Com Stockholders
2,180,000
1,680,000
Net Income Common Stockholders
2,180,000
1,680,000
Net Income
2,180,000
1,680,000
Minority Interests
-30,000
-50,000
Net Income Including Noncontrolling Interests
2,209,000
1,730,000
Net Income Continuous Operations
2,209,000
1,730,000
Tax Provision
797,000
825,000
Pretax Income
3,006,000
2,555,000
Other Income Expense
-46,000
826,000
Other Non Operating Income Expenses
-39,000
-76,000
Special Income Charges
-7,000
-3,000
Restructuring And Mergern Acquisition
7,000
3,000
Net Non Operating Interest Income Expense
403,000
-617,000
Interest Expense Non Operating
323,000
-367,000
Interest Income Non Operating
726,000
-818,000
Operating Income
2,651,000
2,343,000
Operating Expense
4,577,000
4,573,000
Other Operating Expenses
14,000
22,000
Research And Development
1,844,000
1,698,000
Selling General And Administration
2,719,000
2,853,000
Selling And Marketing Expense
2,315,000
2,303,000
General And Administrative Expense
404,000
550,000
Other Gand A
404,000
550,000
Gross Profit
7,228,000
6,916,000
Cost Of Revenue
2,650,000
2,768,000
Total Revenue
9,878,000
9,684,000
Operating Revenue
9,878,000
9,684,000
Balance Sheet
2026
2025
2024
Treasury Shares Number
60,945
61,915
Ordinary Shares Number
1,154,204
1,167,559
Share Issued
1,154,204
1,228,504
Total Debt
10,507,000
7,476,000
Tangible Book Value
11,696,000
13,290,000
Invested Capital
44,742,000
50,378,000
Working Capital
2,915,000
2,840,000
Net Tangible Assets
11,696,000
13,290,000
Capital Lease Obligations
1,684,000
1,715,000
Common Stock Equity
44,742,000
44,586,000
Total Capitalization
44,742,000
48,780,000
Total Equity Gross Minority Interest
45,247,000
45,074,000
Minority Interest
505,000
488,000
Stockholders Equity
44,742,000
44,586,000
Other Equity Interest
1,155,000
396,000
Treasury Stock
9,190,000
6,948,000
Retained Earnings
48,579,000
47,345,000
Additional Paid In Capital
2,969,000
2,564,000
Capital Stock
1,229,000
1,229,000
Common Stock
1,229,000
1,229,000
Total Liabilities Net Minority Interest
30,362,000
25,288,000
Total Non Current Liabilities Net Minority Interest
10,628,000
7,872,000
Other Non Current Liabilities
458,000
394,000
Employee Benefits
524,000
749,000
Tradeand Other Payables Non Current
671,000
564,000
Non Current Deferred Liabilities
347,000
216,000
Non Current Deferred Revenue
136,000
144,000
Non Current Deferred Taxes Liabilities
211,000
72,000
Long Term Debt And Capital Lease Obligation
8,541,000
5,624,000
Long Term Capital Lease Obligation
1,430,000
1,420,000
Long Term Debt
4,194,000
5,300,000
Long Term Provisions
611,000
550,000
Current Liabilities
19,734,000
17,416,000
Other Current Liabilities
3,700,000
1,132,000
Current Deferred Liabilities
9,843,000
6,581,000
Current Deferred Revenue
9,843,000
6,581,000
Current Debt And Capital Lease Obligation
1,966,000
1,852,000
Current Capital Lease Obligation
254,000
295,000
Current Debt
1,598,000
3,636,000
Other Current Borrowings
1,100,000
3,138,000
Commercial Paper
498,000
498,000
Pensionand Other Post Retirement Benefit Plans Current
3,915,000
4,511,000
Current Provisions
119,000
537,000
Payables And Accrued Expenses
4,106,000
3,399,000
Payables
4,106,000
3,399,000
Total Tax Payable
1,359,000
968,000
Accounts Payable
2,747,000
2,431,000
Total Assets
75,609,000
70,362,000
Total Non Current Assets
52,960,000
50,106,000
Other Non Current Assets
4,450,000
Non Current Prepaid Assets
626,000
430,000
Non Current Deferred Assets
2,381,000
5,845,000
Non Current Deferred Taxes Assets
2,381,000
2,163,000
Non Current Accounts Receivable
456,000
573,000
Financial Assets
547,000
593,000
Investments And Advances
8,123,000
6,722,000
Investmentin Financial Assets
8,123,000
6,580,000
Available For Sale Securities
8,123,000
6,580,000
Long Term Equity Investment
142,000
144,000
Investmentsin Associatesat Cost
142,000
144,000
Goodwill And Other Intangible Assets
33,046,000
31,296,000
Other Intangible Assets
2,638,000
2,282,000
Goodwill
30,408,000
29,014,000
Net PPE
4,504,000
4,497,000
Gross PPE
4,497,000
4,493,000
Leases
1,370,000
1,391,000
Construction In Progress
195,000
156,000
Other Properties
107,000
66,000
Machinery Furniture Equipment
1,328,000
1,379,000
Land And Improvements
1,497,000
1,501,000
Current Assets
22,649,000
20,256,000
Other Current Assets
3,268,000
265,000
Current Deferred Assets
1,412,000
1,350,000
Prepaid Assets
1,256,000
988,000
Receivables
7,756,000
7,551,000
Other Receivables
885,000
543,000
Taxes Receivable
680,000
876,000
Accounts Receivable
7,076,000
5,790,000
Cash Cash Equivalents And Short Term Investments
11,625,000
9,772,000
Other Short Term Investments
1,114,000
1,552,000
Cash And Cash Equivalents
10,511,000
8,220,000
Cash Equivalents
4,310,000
5,647,000
Cash Financial
3,910,000
3,962,000
Cash Flow
2026
2025
2024
Free Cash Flow
3,038,000
1,117,000
Repurchase Of Capital Stock
-321,000
0
Repayment Of Debt
-1,658,000
-1,180,000
Issuance Of Debt
0
1,516,000
Capital Expenditure
-116,000
-180,000
End Cash Position
10,511,000
8,220,000
Beginning Cash Position
9,648,000
8,554,000
Effect Of Exchange Rate Changes
-37,000
-110,000
Changes In Cash
900,000
-224,000
Financing Cash Flow
-511,000
-1,303,000
Cash Flow From Continuing Financing Activities
-510,000
-1,302,000
Net Other Financing Charges
-24,000
0
0
Interest Paid Cff
-111,000
-123,000
Cash Dividends Paid
-2,883,000
0
Net Common Stock Issuance
-321,000
0
Common Stock Payments
-321,000
0
Net Issuance Payments Of Debt
2,828,000
-1,180,000
Net Long Term Debt Issuance
2,828,000
-1,180,000
Long Term Debt Payments
-1,658,000
-1,180,000
Long Term Debt Issuance
0
1,516,000
Investing Cash Flow
-1,742,000
-218,000
Cash Flow From Continuing Investing Activities
-1,743,000
-219,000
Interest Received Cfi
71,000
103,000
Net Investment Purchase And Sale
-732,000
-151,000
Sale Of Investment
454,000
1,325,000
Purchase Of Investment
-1,186,000
-1,476,000
Net Business Purchase And Sale
-989,000
-2,000
Purchase Of Business
-989,000
-2,000
Net Intangibles Purchase And Sale
-93,000
-169,000
Sale Of Intangibles
23,000
11,000
Purchase Of Intangibles
-116,000
-180,000
Operating Cash Flow
3,154,000
1,297,000
Cash Flow From Continuing Operating Activities
3,152,000
1,298,000
Taxes Refund Paid
-836,000
-918,000
Interest Received Cfo
143,000
Interest Paid Cfo
-111,000
Change In Working Capital
756,000
-804,000
Change In Other Working Capital
-404,000
-155,000
Change In Other Current Assets
-111,000
-950,000
Change In Payables And Accrued Expense
-305,000
1,368,000
Change In Payable
-305,000
1,368,000
Change In Account Payable
-305,000
1,368,000
Change In Receivables
1,576,000
-1,067,000
Other Non Cash Items
-556,000
-177,000
Stock Based Compensation
468,000
316,000
Deferred Tax
797,000
825,000
Deferred Income Tax
797,000
825,000
Depreciation Amortization Depletion
316,000
325,000
Depreciation And Amortization
316,000
325,000
Net Income From Continuing Operations
2,209,000
1,730,000
📊Quarterly mode — Graham Fair Value & 7 Criteria require annual data. Switch to Annual for full analysis.
Quarter vs Same Quarter Last Year
YoY strips seasonality
Revenue Growth (YoY)
Prior year: $9.0B▲ $9.9B+9.4%
Revenue growth vs same quarter last year strips seasonality. Consistent double-digit growth is a Buffett hallmark.
Gross Margin
Prior year: 73.3%▲ 73.2%-0.2pp
Buffett: consistent gross margin above 40% signals durable pricing power and competitive moat.
Operating Margin
Prior year: 29.4%▲ 26.8%-2.5pp
Graham: operating margin reflects true business economics before financing. Trend matters as much as level.
Net Margin
Prior year: 18.8%▲ 22.1%+3.3pp
Net margin can be distorted by one-time items, tax timing, or interest costs — compare to operating margin for signal quality.
Quarterly Health Checks
3 Graham/Buffett criteria that are valid and reliable on quarterly data
✅ Adequate Size
Graham required scale for resilience. Quarterly revenue × 4 gives an annualised proxy.
$9.9B/qtr (≈$39.5B ann.)
vs > $1.5B annualised revenue
❌ Financial Condition
Current assets vs current liabilities — a real-time liquidity snapshot. Valid and reliable on quarterly data.
1.15x current ratio
vs ≥ 2.0x
✅ Free Cash Flow
Buffett's most important single metric. A positive FCF quarter means the business generated real cash for owners after maintaining its asset base.
$3.0B
vs Positive
Operating Cash Flow
$3.2B
Latest quarter · Buffett's cash reality check
ROIC
3.7%
Based on latest annual operating income
Return on Invested Capital — Buffett's preferred measure for asset-light businesses. ROIC > 15% consistently signals a durable competitive advantage (moat). More meaningful than P/B for software, pharma, and consumer brand companies where most value is intangible and off-balance-sheet.
Market Cap / Net Assets
4.8x
Net Assets: $45.2B
Asset Context — Software - Application
Software companies store most of their value in code, IP, recurring revenue, and customer relationships — none of which appear on the balance sheet under GAAP. Book value and Net Assets are poor proxies for intrinsic value here. Focus on ROIC, gross margin trajectory, and free cash flow instead.
⚠️Revenue grew vs prior year but operating margin contracted. Possible explanations: deliberate investment in growth (hiring, marketing, R&D), input cost inflation, or pricing pressure from competition. Buffett distinguishes between spending that builds moat vs. spending that doesn't.
Peers & Industry
No auto-detected peers for Software - Application. You can manually compare SAP against any stock using the Compare tool.
"The management of a business is its most important single factor — more important than market position, patents, or financial structure."
— Benjamin Graham
Capital Allocation & Alignment
Insider Ownership
0.00%
Low — management has little skin in the game
Return on Equity (ROE)
4.9%
Weak — poor returns on equity
Return on Assets (ROA)
2.9%
Fair — average asset utilization
Share Buybacks (Latest Year)
$1.9B
Management is returning capital to shareholders via buybacks
Debt Trend YoY
+33.6% YoY
Debt is growing — management is leveraging up
Leadership Team
Christian Klein
CEO & Member of Executive Board
Age 45
Pay: $6,070,871
0.278% of net income
Dominik Asam
CFO & Member of Executive Board
Age 56
Pay: $2,918,355
0.134% of net income
Sebastian Steinhaeuser
Chief Strategy Officer & COO and Member of Executive Board
Age 39
Pay: $2,456,955
0.113% of net income
Top Institutional Holders
Institution
% Owned
Shares
Fisher Asset Management, LLC
1.24%
14,534,441
Eagle Capital Management LLC
0.67%
7,848,603
FMR, LLC
0.56%
6,581,080
Capital International Investors
0.43%
5,011,856
Shaw D.E. & Co., Inc.
0.36%
4,256,672
Morgan Stanley
0.31%
3,616,017
Goldman Sachs Group Inc
0.28%
3,300,374
Windacre Partnership LLC
0.24%
2,762,125
Risk Analysis
Beta (Market Risk)
0.76
Low volatility — more stable than the market
Short Interest
0.8% of float
Low short interest — market is not heavily bearish
Debt-to-Equity
0.22x
Conservative balance sheet — low financial risk
Current Ratio
1.15x
Adequate liquidity
52-Week Price Range
Low: $144.97Current: $189.75High: $299.48
Currently at 29% of 52-week range
SAP SE (SAP) fundamental analysis — Overall grade C based on profitability, financial health, valuation and cash flow. Graham's
Fair Value: $40.49. Margin of safety: 0%. Gross profit margin: 73.2%. Operating margin: 26.8%. Net margin: 22.1%. Market cap: $219.0B. Sector: Technology. Industry: Software - Application. Analysis powered by 360investing — free fundamental stock analysis based on Benjamin Graham and Warren Buffett
principles.
Disclaimer: 360investing is provided for informational and educational purposes only and does not constitute financial, investment, legal, or tax advice. All data is sourced from public third-party providers
and may be delayed, inaccurate, or incomplete. Past performance is not indicative of future results. Analysis, scores, and valuations are algorithmic and do not represent professional investment recommendations. Always conduct your own due
diligence and consult a qualified financial adviser before making any investment decision. Use of this tool constitutes acceptance that 360investing and its operators bear no liability for decisions made based on information presented here.