German software company SAP (SAP) has reported financial results and forward guidance that surpassed Wall Street estimates, sending its share price up 4% in after-hours trading.
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Europe’s biggest software company announced earnings per share of €1.23 (US$1.33), which beat the TipRanks consensus expectation that had called for $1.32. Revenue in the quarter rose 9% year-over-year to €8.47 billion.
The company attributed the positive results to its cloud computing segment, where revenue grew by 25% in the year’s third quarter. Management said customers are shifting to the cloud, where it provides artificial intelligence (AI) business services.
SAP Outlook
In terms of forward guidance, SAP said that it expects to generate between €29.5 billion and €29.8 billion in cloud and software revenue for the full year, raising the midpoint by €400 million.
The company also raised its outlook for free cash flow, which is now seen at €3.5 billion to €4 billion, up from about €3.5 billion previously. Its guidance for 2024 cloud revenue remains unchanged at €17 billion to €17.3 billion at constant currencies.
SAP stock has risen 50% so far in 2024.
Is SAP Stock a Buy?
SAP stock has a consensus Strong Buy rating among eight Wall Street analysts. That rating is based on seven Buy and one Hold recommendations assigned in the last three months. The average SAP price target of $247 implies 7.63% upside potential from current levels.
