SAP SE (SAP) Moving On Heavy Pre-Market Trading

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified SAP SE ( SAP) as a pre-market mover with heavy volume candidate. In addition to specific proprietary factors, Trade-Ideas identified SAP SE as such a stock due to the following factors:

  • SAP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $46.3 million.
  • SAP traded 68,090 shares today in the pre-market hours as of 7:53 AM, representing 10.9% of its average daily volume.

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More details on SAP:

SAP AG provides enterprise application software and software-related services worldwide. The stock currently has a dividend yield of 2.3%. SAP has a PE ratio of 20.7. Currently there are 4 analysts that rate SAP SE a buy, 1 analyst rates it a sell, and 8 rate it a hold.

The average volume for SAP SE has been 826,200 shares per day over the past 30 days. SAP SE has a market cap of $92.7 billion and is part of the technology sector and computer software & services industry. Shares are down 11.2% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates SAP SE as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 11.9%. Since the same quarter one year prior, revenues slightly increased by 5.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • SAP's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.95 is somewhat weak and could be cause for future problems.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The gross profit margin for SAP SE is currently very high, coming in at 74.81%. Regardless of SAP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 13.41% trails the industry average.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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