SAP SE SAP recently added new features to its SuccessFactors Human Experience Management (HXM) suite. The new features are aimed at helping businesses gain a better knowledge of the abilities of their workforce and subsequently align resources per organizational requirements.
SAP added innovations like skill ontology, growth portfolio and Dynamic Teams to the SuccessFactors suite, available as early adopter from the fourth quarter of 2022. These new functionalities utilize data, machine learning and artificial intelligence (AI) to help business organizations to create an integrated talent development strategy. The growth portfolio will be a library of employee attributes, like strengths and skills and workstyles.
With Dynamic Teams functionality, organizations that already use the SAP SuccessFactors Performance & Goals solution will be able to add objective key results (OKRs) to the solution to measure progress and success. Dynamic teams allow enterprises to create, track, evaluate and enhance the outcomes of teams other than the traditional hierarchical teams, added SAP.
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Powered by machine learning and automation, Skills ontology innovation is tasked with continuously identifying an employee's skills based on their role, responsibilities and experiences, added SAP. This will provide a thorough view of the entire workforce’s skills.
To encourage a sense of belonging, employees can add their chosen names and personal pronouns to their public profiles through the SuccessFactors platform. This feature will be available from the fourth quarter of 2022 for all SuccessFactors customers, noted SAP.
SAP SuccessFactors is a comprehensive cloud-based HR solution that includes various applications like Employee Central, Employee Central Payroll, and Talent Management. SuccessFactors Employee Central forms the backbone of the company’s HXM offerings. Robust market traction of these solutions remains a key growth driver for SAP.
Per a Fortune Business Insights report, the worldwide human capital management (HCM) market will likely witness a CAGR of 9.1% between 2022 and 2029 and reach $46.85 billion. The report stated that increasing usage of AI and higher talent mobility activities are providing further impetus to the HCM market, added the report. This augurs well for SAP, one of the leading players in the space.
However, increasing competition in the HCM space from the likes of Workday and Oracle is a major concern. The continued decline in software license revenues and increasing costs to enhance cloud-based offerings will likely exert pressure on the company’s profitability in the near term.
SAP lowered full-year operating profit guidance due to the €350-million negative impact from the war in Ukraine and weak software licenses business.
SAP currently carries a Zacks Rank #5 (Strong Sell). Shares of the company have lost 40.5% compared with the industry’s fall of 22.9% in the past year.
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Stocks to Consider
Some better-ranked stocks from the broader technology space are Cadence Design Systems CDNS, Keysight Technologies KEYS and Arista Networks ANET. Arista sports a Zacks Rank #1 (Strong Buy) while Keysight and Cadence carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for CDNS 2022 earnings is pegged at $4.11 per share, rising 5.7% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.7%.
Cadence’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 9.8%. Shares of CDNS have lost 0.4% in the past year.
The Zacks Consensus Estimate for Keysight’s fiscal 2022 earnings is pegged at $7.47 per share, up 4.3% in the past 60 days. The long-term earnings growth rate is anticipated to be 11%.
Keysight’s earnings beat the Zacks Consensus Estimate in all of the preceding four quarters, the average being 9.3%. Shares of KEYS have lost 6.3% of their value in the past year.
The Zacks Consensus Estimate for Arista Network’s 2022 earnings is pegged at $4.04 per share, increasing 10.1% in the past 60 days. The long-term earnings growth rate is anticipated to be 18.6%.
Arista Network’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 10.1%. Shares of ANET have increased 33.6% in the past year.
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