Yahoo Finance SAP Set to Report Q1 Earnings: Here's What You Should Know
SAP SE SAP is slated to report first-quarter 2024 results on Apr 22.
The Zacks Consensus Estimate for revenues is pegged at $8.73 billion, implying an improvement of 9.4% from the year-ago quarter’s reported figure. The consensus mark for earnings is pegged at $1.13 per share, indicating a decrease of 2.6% from the prior-year quarter.
SAP reported fourth-quarter 2023 non-IFRS earnings per share (EPS) of €1.41, which increased 44% from the year-ago quarter. Total revenues on a non-IFRS basis of €8.468 billion increased 5% year over year (up 9% at constant currency or cc).
SAP SE Price and EPS Surprise
SAP SE price-eps-surprise | SAP SE Quote
Factors to Note
SAP’s performance in the to-be-reported quarter is likely to have benefited from continued momentum in cloud business. In the last reported quarter, the current cloud backlog — a key indicator of go-to-market success in cloud business — increased 25%. Our estimate for cloud revenues (on a non-IFRS basis) for the first quarter is pegged at €3.91 billion, up 23.1% from the year-ago quarter.
Momentum in SAP’s business technology platform, particularly S/4HANA solutions, augurs well. More companies have begun deploying S/4HANA solutions partly or entirely in the cloud. In the last reported quarter, SAP S/4HANA cloud revenues increased 55% (up 61% at cc) year over year to €1.03 billion.
The growing adoption of Rise with SAP solution is a major tailwind. In the last reported quarter, it was adopted by major companies such as Coles Group, Covestro, IBM, KONE, Kyndryl etc. Also, the company is working with NVIDIA to empower enterprise customers to leverage data and generative AI more effectively across SAP's cloud solutions and applications.
The company is also likely to have gained from growing momentum in the SAP Business Technology Platform and recently launched Grow with SAP solution. In the last reported quarter, GROW with SAP was adopted by Lowe Enterprises, Okuma Europe, Serrala Group and Solidia Technologies.
However, the company’s performance is affected by continued softness in the Software license and support business segment coupled with global macroeconomic weakness and geopolitical instability. Also, increasing research & development costs and stiff competition in the cloud space are concerns.
Recent Key Developments
In March, SAP announced its association with Deutsche Telekom to bring digital transformation to the latter’s cloud infrastructure. DTEGY is deploying SAP’s RISE with SAP solution to upgrade a significant portion of its ERP landscape to SAP S/4HANA Cloud.
In February, the company announced the creation of a new comprehensive growth area focused on AI and named Dr. Philipp Herzig as its chief artificial intelligence officer. The newly created division will monitor the entire value chain for SAP Business AI, from product development and research through to customer implementation.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for SAP this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
SAP has an Earnings ESP of -17.03% and a Zacks Rank #5 (Strong Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks you may consider, as our model shows that these have the right combination of elements to beat on earnings this season.
IMAX Corporation IMAX has an Earnings ESP of +36.84% and currently carries a Zacks Rank #2. IMAX is scheduled to report quarterly earnings on Apr 25. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for IMAX’s to-be-reported quarter’s earnings and revenues is pegged at 10 cents per share and $75.8 million, respectively. Shares of IMAX have gained 41% in the past year.
Meta Platforms META has an Earnings ESP of +3.26% and presently carries a Zacks Rank #2. META is slated to release quarterly numbers on Apr 24.
The Zacks Consensus Estimate for META’s to-be-reported quarter’s earnings and revenues is pegged at $4.31 per share and $36.22 billion, respectively. Shares of META have lost 3.9% of their value in the past year.
Lam Research Corporation LRCX has an Earnings ESP of +0.26% and a Zacks Rank #3. LRCX is set to report quarterly figures on Apr 24.
The Zacks Consensus Estimate for LRCX’s to-be-reported quarter’s earnings and revenues is pegged at $7.23 per share and $3.70 billion, respectively. Shares of LRCX have surged 104.1% in the past year.
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