SAP SE
SAP
recently concluded the buyout of a majority stake in the working capital management solutions company — Taulia — for an undisclosed amount.
With the stake buyout, SAP is looking to boost its Business Network capabilities and bolster finance solutions. Following the stake buyout, Taulia will continue to function as an independent company within the SAP Group, while Cédric Bru will remain CEO. SAP also stated that JP Morgan would continue to hold its equity stake in the company.
San Francisco-based Taulia specializes in providing early payment through dynamic discounting, supply chain and accounts receivable finance. The company boasts a strong ecosystem of financial partners, including the likes of UniCredit and JP Morgan, among other high-profile financial institutions.
SAP’s sound
acquisition
strategy has been boosting its business performance. In 2021, SAP
acquired
AppGyver and Signavio. Finland-based AppGyver Oy is a no-code development platform helping clients (who know nothing about coding) create apps for mobile and web uses. Signavio is a well-known name in the business process intelligence and process management domain.
Prior to that, SAP acquired Emarsys in October 2020 to boost its solutions under the SAP Customer Experience portfolio. With the Emarsys buyout, SAP is looking to offer brands the ability to conduct commerce any time across all channels (social, e-mail, mobile, SMS, and web at scale) and provide clients with customized one-to-one interactions.
SAP’s performance is benefiting from strength in its cloud business, especially the Rise with SAP solution. Rise with SAP offering was launched in first-quarter 2021 and now has a 1,300-strong user base. SAP’s last-quarter performance benefitted from strength in its cloud business, especially the Rise with SAP solution.
In the fourth quarter of 2021, SAP reported total revenues, on a non-IFRS basis, of €7.981 billion ($9.128 billion). The figure increased 6% year over year (up 3% at constant currency or cc).
For 2022, SAP anticipates cloud revenues in the range of €11.55-€11.85 billion, suggesting an increase of 23-26% at cc. Cloud and software revenues are now expected between €25 billion and €25.5 billion, calling for a 4-6% rise at cc.
Zacks Rank & Stocks to Consider
Currently, SAP has a Zacks Rank #3 (Hold).
Some better-ranked stocks worth considering from the broader technology sector include Broadcom
AVGO
, Apple
AAPL
and Texas Instruments
TXN
. Texas Instruments sports a Zacks Rank #1 (Strong Buy), while Apple and Broadcom carry a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Broadcom’s fiscal 2022 earnings is pegged at $35.49 per share. The long-term earnings growth rate of the company is pegged at 14.5%.
Broadcom’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average surprise being 1.9%. Shares of Broadcom have increased 26.3% in the past year.
The Zacks Consensus Estimate for Apple’s fiscal 2022 earnings is pegged at $6.16 per share. The long-term earnings growth rate of the company is pegged at 12.5%.
Apple’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 20.3%. Shares of AAPL have rallied 25.5% in the past year.
The Zacks Consensus Estimate for Texas Instruments for 2022 earnings is pegged at $9.09 per share. The long-term earnings growth rate of the company is pegged at 9.3%.
Texas Instruments’ earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 12.4%. Shares of TXN are down 0.3% in the past year.
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