SAP Gears Up for Q4 Earnings: Here's What You Should Know

SAP SE SAP is scheduled to report results for the fourth quarter of 2024 on Jan. 28.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.The Zacks Consensus Estimate for fourth-quarter 2024 earnings has been revised 2.9% downward in the past 60 days and is pegged at $1.33 per share. Additionally, the consensus mark implies a 12.5% decline from the year-ago reported actuals. The Zacks Consensus Estimate for fourth-quarter 2024 revenues is currently pegged at $9.66 billion, indicating a 5.9% increase from the year-ago reported figure.SAP's earnings surpassed the Zacks Consensus Estimate in two of the preceding four quarters and missed the same in the remaining two, delivering an average beat of 1.55%.Factors Shaping the Upcoming Results for SAPSAP’s performance is expected to have benefited from steady momentum in its cloud business. Rapid adoption of Rise with SAP solution is one of the major drivers of cloud business. This solution helps companies transform business processes and operations to become more nimble, digital and intelligent. The increasing adoption of this solution also offers tremendous cross-sell opportunities, thereby generating revenues across the portfolio.Momentum in other cloud offerings like Grow with SAP and SAP Datasphere, as well as strategic acquisitions and collaborations, bodes well for its cloud business. For 2024, SAP expects cloud revenues to be in the range of €17-€17.3 billion, indicating an increase of 24-27% at constant currency (cc) on a year-over-year basis. Management anticipates cloud and software revenues to be in the range of €29.5-€29.8 billion, implying an increase of 10-11% at cc on a year-over-year basis.SAP has been focusing on expanding its reach into the mid-market with a stronger emphasis on partner ecosystems. By empowering partners to target mid-market businesses, SAP has been working to tap into a highly profitable sales channel that has previously been underutilized. SAP has been also focusing on integrating AI across its product suite as the company expects business AI to play a key role in driving cloud ERP suite revenues. In the third quarter, SAP highlighted that around 30% of the cloud order entries included AI use cases.SAP SE Price and EPS Surprise SAP SE price-eps-surprise | SAP SE QuoteIn the last earnings call, management highlighted that it incorporated more than 500 skills into the company’s AI co-pilot Joule and was progressing to cover 80% of the business and analytical transactions by the end of 2024. In September 2024, SAP concluded the buyout of Israel-based WalkMe for $1.5 billion. Embedding WalkMe’s adoption capabilities with SAP’s copilot Joule will strengthen AI assistance and productivity for its customers.However, the company’s performance is affected by continued softness in the Software license and support business segment coupled with global macroeconomic weakness and geopolitical instability.  Also, increasing research & development costs and stiff competition in the cloud space are concerns.What Our Model Says About SAPOur proven model does not predict an earnings beat for SAP this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.SAP has an Earnings ESP of -2.39% and a Zacks Rank #4 (Sell) at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Stocks to ConsiderHere are some stocks you may consider, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.V.F. Corporation VFC currently has an Earnings ESP of +4.30% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here. VFC is scheduled to report quarterly earnings on Jan. 29. The Zacks Consensus Estimate for VFC’s quarterly earnings and revenues is pegged at 34 cents per share and $2.75 billion, respectively. Shares of VFC have gained 50.3% in the past year.Logitech International S.A. LOGI presently has an Earnings ESP of +4.96% and a Zacks Rank #2. LOGI is scheduled to report quarterly numbers on Jan. 28. The Zacks Consensus Estimate for LOGI’s quarterly earnings and revenues is pegged at $1.37 per share and $1.24 billion, respectively. Shares of LOGI have risen 7.3% in the past year.ServiceNow, Inc. NOW has an Earnings ESP of +0.91% and a Zacks Rank #2 at present. NOW is scheduled to report quarterly figures on Jan. 29. The Zacks Consensus Estimate for earnings and revenues is pegged at $3.58 per share and $2.95 billion, respectively. Shares of NOW have risen 47.9% in the past year.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Logitech International S.A. (LOGI): Free Stock Analysis Report V.F. Corporation (VFC): Free Stock Analysis Report SAP SE (SAP): Free Stock Analysis Report ServiceNow, Inc. (NOW): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks