SAP extends lead as Europe's most valuable company after earnings beat

Dow Jones
04/23

MW SAP extends lead as Europe's most valuable company after earnings beat

By Steve Goldstein

SAP on Wednesday extended its lead as Europe's most valuable company after the business-software company's stock surged by the most in six years.

SAP shares (XE:SAP) $(SAP)$ rose as much as 11% in Frankfurt, putting further distance between it and Nestle (CH:NESN), ASML Holding $(ASML)$ and Roche Holding (CH:ROG) as the largest European companies by market cap.

Even so, SAP's new market cap, at around $320 billion, would not even put it in the top 20 American companies, though it is worth more than rival Salesforce $(CRM)$ and not far behind Oracle $(ORCL)$.

SAP beat the average analyst operating profit forecast by about 11%, even as cloud revenue growth of 26% came in slightly below forecasts.

Analysts at Stifel said the profit beat came from solid revenue growth, lower stock-based compensation and the benefits of last year's restructuring.

"This is a strong set of results and illustrates the resilience and defensiveness of SAP's earnings trajectory," added analysts at JPMorgan.

Crucially, SAP reiterated its financial targets. "We really see that we have solid, really good pipeline for the year. And so far, also not in April, we have not yet seen that there is any deterioration of conversion rates in the pipeline," Chief Executive Christian Klein said during a conference call, according to a FactSet transcript.

-Steve Goldstein

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(END) Dow Jones Newswires

April 23, 2025 08:53 ET (12:53 GMT)

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