Posted 1/7/2024, 7:57:19 AM
SAP's High Valuation Justified by Expected Earnings Growth, But Risks Remain
- SAP SE has a very high P/E ratio of 79.4x compared to the market average, indicating potential overvaluation
- SAP's earnings have been declining faster than other companies recently, over 50% in the last year
- Analysts forecast SAP's earnings to recover and grow by 44% per year over the next 3 years
- SAP's high P/E ratio seems justified by the expected high growth, though there are risks if growth disappoints
- The article cautions against solely relying on P/E ratios and notes SAP's growth prospects support its valuation