Is SAP (XTRA:SAP) Undervalued Following New Customer Experience Partnership Wins?

Recent client announcements around SAP (XTRA:SAP) focus on customer experience. Trifork Group and N4XT are expanding partnerships that put SAP Customer Experience and SAP Sales Cloud v2 at the center of new deployment projects.

SAP’s recent client wins come after a choppy share price run. The stock is down 2.76% on the day and shows a 7-day share price return of 4.18% in the red, but a much stronger 90-day share price return of 26.78%. The 3-year total shareholder return of 45.04% contrasts with a weaker 1-year total shareholder return of 17.72% in decline, suggesting that longer term holders still sit on gains while shorter term sentiment has cooled.

Scan for other enterprise software and AI plays showing similar customer-experience momentum by checking our curated list of 89 AI infrastructure stocks in the current market cycle.

For SAP, the recent slide after a strong 3 month run can read either as sentiment cooling or as the market reassessing the underlying progress. Which lens fits the current valuation setup?

Most Popular Narrative: 14.2% Undervalued

SAP’s most followed narrative pegs fair value at about €207 per share compared with a last close of €177.82, which implies meaningful upside in that framework.

The accelerating global push for digital supply chain resilience and business process digitalization is enlarging SAP's addressable market, as evidenced by record cloud backlog, robust new pipeline development (including post-Sapphire event momentum), and consistently strong double-digit growth in cloud ERP.

Read the complete narrative.

Want to see what powers that valuation gap for SAP? The narrative focuses on recurring cloud revenue, richer margins, and a future earnings profile that assumes investors still pay up for quality software cash flows.

Result: Fair Value of €207.19 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

Still, the whole setup can break if SAP stumbles on AI monetization or if cloud backlog momentum cools faster than current assumptions imply.

Find out about the key risks to this SAP narrative.

Next Steps

Sentiment around SAP can look split on the surface, so use that urgency as a reason to pressure test the numbers yourself and move quickly to your own view. To see what the optimism is built on, review the 3 key rewards.

Looking for more investment ideas beyond SAP?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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