No. of Recommendations: 24
Nothing to do with Berkshire other than a possible whiff of value. Has anybody looked at SAP SE? Trades as SAP in the US, and also as SAP in euros in Germany.
Europe's largest software firm, perhaps the world's largest enterprise software provider. Trading at $176.41 down from a high of $313.28 last July. Down 27% just year-to-date, a prime victim of the SaaSpocalypse.
Because, well, obviously nobody will ever need to buy or lease software again, they'll just vibe it into existence with their favourite LLMs because AI is going to take over everything. Yet of course their clients won't ever buy any of SAP's own AI products and there will be no productivity gain for SAP's in-house programmers because obviously all the AI stuff is just hype.
As with many software firms they're in the late stages of a switch from lumpy perpetual license sales to subscription-only, which causes a one time hit to revenues and profits but can lead to very nice things after that, witness Adobe: revenues flattish 2010-2015 which is I think when they were in the midst of the transition, but growth on most metrics of 20-25%/year since, and net margins have doubled.
FWIW, median trailing P/E in the last decade about 27. Current price is 21 times consensus EPS for 2026, and 17.8 times consensus for next year. Barring an actual SaaSpocalypse (rather that merely the fear of it), growth expectations have been good. It might count as a good business at a fair price. (I would have said "very good business", which may be true, except I don't like the level of stock based comp)
Jim
Threads from late January on Falling Knives
https://www.shrewdm.com/MB?pid=200327279&wholeThre......and on Non-US Stocks
https://www.shrewdm.com/MB?pid=346204085&wholeThre... 