SAP Should I Buy
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BUY now for a rebound trade. SAP is deeply oversold (RSI_6 23) and sitting right on the first support zone (203), which often attracts dip-buyers after a sharp post-earnings selloff. While the broader trend is still bearish (moving averages and MACD), the near-term risk/reward is attractive for an impatient buyer looking for a quick mean-reversion bounce. Upside targets to watch are the pivot area (~220) first, then ~237 if momentum improves; the key line in the sand is ~192 (next support).
Trend is bearish but stretched/oversold. Moving averages are stacked bearishly (SMA_200 > SMA_20 > SMA_5), confirming a broader downtrend. MACD histogram is -3.068 and negatively expanding, showing downside momentum is still present. RSI_6 is 23, signaling a heavily oversold condition (despite the provided note calling it 'neutral'), which increases the odds of a short-term bounce. Price is trading near S1 (203.085) with S2 around ~192.495; resistance levels are ~220.226 (pivot) and ~237.368 (R1). Given today’s modest green move (+1.19%) after a large prior drop, the setup favors a technical snapback rather than a confirmed trend reversal.
Q4 2025 cloud revenue grew 26% YoY (supports the longer-term cloud transition story). Financial growth was strong in the latest quarter (revenue +12.71% YoY; EPS +27.78% YoY; net income +25.85% YoY). Several Wall Street firms remain constructive with Buy/Overweight ratings and high price targets (e.g., Jefferies Buy with EUR 290; Citi Buy with EUR 280; JPMorgan Overweight with EUR 290; Arete upgraded to Buy with EUR 270), supporting dip-buying interest after the selloff.
Q4 revenue missed expectations and the stock saw a sharp selloff tied to disappointment around demand metrics. Current cloud backlog grew 16% to €21.05B and came in short of the CEO’s target, pressuring confidence in forward growth. Citizens downgraded to Market Perform, citing slowdown/peak dynamics in the S/4HANA upgrade cycle and Business AI being early-cycle. Technically, downside momentum is still present (bearish MA stack and weakening MACD), so price could still probe lower support near ~192 before stabilizing.
Latest reported quarter: 2025/Q4. Revenue rose to 11.27B (+12.71% YoY), net income increased to 2.15B (+25.85% YoY), and EPS increased to 1.84 (+27.78% YoY), indicating accelerating earnings leverage. Gross margin dipped to 73.54% (-1.09% YoY), a mild profitability headwind, but overall the quarter shows solid growth trends despite topline expectations being missed in the market narrative.
Recent trend: mixed but still net-positive. Multiple firms kept bullish stances but trimmed price targets (Citi cut to EUR 280 from EUR 295; JPMorgan cut to EUR 290 from EUR 310), implying valuation support but tempered near-term enthusiasm. Arete upgraded to Buy (EUR 270), while Citizens downgraded to Market Perform (no PT) citing slower backlog growth and a potentially peaking upgrade cycle. Wall Street pros: higher-quality, more recurring revenue/visibility and long runway in cloud. Cons: signs of decelerating backlog/upgrade-cycle tailwinds and AI monetization still early, leaving near-term growth expectations vulnerable.
