SAP (SAP, $152.27) preliminary results beat expectations

SAP's preliminary report revealed Q2 results that were higher than analysts’ expectations.

In the preliminary report (that comes ahead of a full Q2 report due on July 27),  SAP states that the software company’s  Q2 revenue rose +2% annually on a non-IFRS basis to €6.74 billion($7.62 billion).  That is above  FactSet consensus estimate of €6.69 billion ($7.56 billion)

However, the figure is slower than Q1’s 7% growth.

On the other hand, SAP’s competitor Oracle   experienced a -6%  drop in revenue during its May quarter, and provided guidance (during its June 16 earnings call) for August quarter revenue growth  in the range of  -1% to up +1%, with a 1% currency headwind.

[ORCL & SAP] are closely correlated.

Both companies represent the Packaged Software industry

Market capitalization -- SAP: $175.4B vs. ORCL: $173.9B

Current volume relative to the 65-day Moving Average: SAP: 56% vs. ORCL: 94%

Long term analysis

It is best to consider a long-term outlook for a ticker by using Fundamental Analysis (FA) ratings. The rating of 1 to 100, where 1 is best and 100 is worst, is divided into thirds. The first third (a green rating of 1-33) indicates that the ticker is undervalued; the second third (a grey number between 34 and 66) means that the ticker is valued fairly; and the last third (red number of 67 to 100) reflects that the ticker is undervalued. We use an FA Score to show how many ratings show the ticker to be undervalued (green) or overvalued (red).

SAP’s FA Score shows that 3 FA rating(s) are green while ORCL’s FA Score has 2’s green FA rating(s).

• SAP’s FA Score: 3 green, 2 red.
• ORCL’s FA Score: 2 green, 3 red.

Short-Term Analysis

It is best to consider a short-term outlook for a ticker by using Technical Analysis (TA) indicators.

SAP’s TA Score shows that 4 TA rating(s) are bullish while ORCL’s TA Score has 6’s bullish TA rating(s).

• SAP’s TA Score: 4 bullish, 3 bearish.
• ORCL’s TA Score: 6 bullish, 1 bearish.

SAP vs ORCL: Fundamental Ratings:

Tickeron ratings are formulated such that a rating of 1 designates the most successful stocks in a given industry, while a rating of 100 points to the least successful stocks for that industry.

ORCL's Valuation (8) in the Packaged Software industry is in the same range as SAP (10). This means that ORCL’s stock grew similarly to SAP’s over the last 12 months.

SAP's Profit vs Risk Rating (13) in the Packaged Software industry is in the same range as ORCL (44). This means that SAP’s stock grew similarly to ORCL’s over the last 12 months.

ORCL's SMR Rating (9) in the Packaged Software industry is in the same range as SAP (32). This means that ORCL’s stock grew similarly to SAP’s over the last 12 months.

SAP's Price Growth Rating (43) in the Packaged Software industry is in the same range as ORCL (47). This means that SAP’s stock grew similarly to ORCL’s over the last 12 months.

SAP's P/E Growth Rating (40) in the Packaged Software industry is in the same range as ORCL (55). This means that SAP’s stock grew similarly to ORCL’s over the last 12 months.

SAP ($175B) and ORCL ($174B) have the same market capitalization. SAP has higher P/E ratio than ORCL: 11.276 vs 7.932. SAP YTD gains are higher at: 11.276 vs. ORCL (7.932). ORCL has higher annual earnings (EBITDA): 17.2B vs. SAP (8.911B). ORCL has more cash in the bank: 37.2B vs. SAP (8.576B). SAP has less debt than ORCL: 19.4B vs 73.7B. ORCL has higher revenues than SAP: 39.1B vs 31.1B.