Ahead of Earnings, Is SAP Stock a Buy, a Sell, or Fairly Valued?

Investors will be focusing on cloud revenue growth, cloud backlog trends, and the software company’s post-2027 trajectory.

SAP SE/Stephan Daub

SAP is set to release its fiscal forth-quarter 2025 earnings report on Jan. 29.

Key Morningstar Metrics for SAP SAP

Cloud revenue growth and current cloud backlog growth remain key:
- Q4 consensus is for 19% cloud revenue growth in reported currency. This includes an approximate negative 7% from currency impacts so constant currency growth is expected to be around 26%.
- 2025 guidance is for current cloud backlog growth to slightly decelerate compared to 2024 (29% in constant currencies). Q1 was 29%, Q2 was 28%, and Q3 was 27%. Management has stated they would be disappointed if Q4 was 25% so we expect it to come in higher than that.
2026 guidance will also be closely watched, especially cloud revenue growth. Consensus is expecting reported cloud revenue growth to be 23%. Guidance on current cloud backlog will also be important.
We will be also looking for updated commentary on the long-term outlook. Previously, management has stated they expect revenue growth to accelerate through 2027. We will be looking for confidence that this will continue beyond 2027.

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