Its been a interesting few months for SAP investors. Stock has jumped from $72 on 6/27/2016 to $103 on 5/12/2017. MCap jumped from $70Billion to $127Billion!!
That opens a possibility to think is the stock headed to a market capitalization of $200 Billion?
I think there are 3 mega trends which may make this happen.
- Upcoming SAP HANA upgrade super cycle – We are seeing that all customers (approximately 55,000 ECC users) will switch to HANA for sure in next few years.
- SAP is winning big time in cloud growth – 330,000 customers with a lot more growth left. I see SAP having ONE million customers in 5 years
- P/E earnings of SAP is so low at 31.5, its unbelievable – compare this with P/E of Salesforce is 343.7!! Workday other competitor’s P/E -50!! Workday lost $105Million on a $436M revenues.
Finally, SAP is THE king of enterprise system. I would be surprised if any other system can close financials the way SAP can execute.
I think there will be a few more acquisitions SAP will do in next 12-24 months, may be WorkDay. I would expect SAP to hit a $200 Billion in market cap before 2020. I am sure Hasso Plattner /@BillRMcDermott and others at SAP will be smiling!
CEO – Ameri100 Inc.
PS: Don’t treat this as a stock advice. Never invest in any stock unless you research thoroughly yourself!