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Sage Group Plc (SGPYY)
:SGPYY
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Sage Group
(OTC:SGPYY)
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Rating:68Neutral
Price Target:
$65.00
▲(11.66% Upside)
Sage Group's overall stock score is driven by its strong financial performance and positive earnings call insights. However, the bearish technical indicators and relatively high valuation limit the score. The company's growth prospects are promising, but macroeconomic uncertainties and reliance on debt warrant caution.
Sage Group (SGPYY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$13.72B
Dividend Yield1.91%
Average Volume (3M)433.00
Price to Earnings (P/E)32.3
Beta (1Y)0.59
Revenue Growth9.34%
EPS Growth34.98%
CountryUS
Employees10,740
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)1.09
Shares Outstanding240,783,890
10 Day Avg. Volume0
30 Day Avg. Volume433
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.24
Enterprise Value/Revenue7.28
Enterprise Value/Gross Profit7.85
Enterprise Value/Ebitda30.05
Forecast
1Y Price Target
$65.00Price Target Upside11.66% Upside
Rating ConsensusHold
Number of Analyst Covering0
Sage Group Business Overview & Revenue Model
Company DescriptionSage Group plc is a leading provider of business management software and services, primarily targeting small and medium-sized enterprises (SMEs). The company operates in the technology sector and specializes in cloud-based solutions, including accounting, payroll, and enterprise resource planning (ERP) systems. Sage's core products aim to simplify financial management and streamline operations for businesses, enhancing productivity and compliance.
How the Company Makes MoneySage Group generates revenue primarily through subscription fees for its cloud-based software solutions, which are billed on a recurring basis. This subscription model provides a steady income stream as customers pay for ongoing access to the software and its updates. Additionally, Sage earns revenue from one-time licensing fees for its on-premise software products, as well as from professional services such as implementation, training, and customer support. Key revenue streams also include partnerships with financial institutions and other organizations that integrate Sage's software into their offerings, further expanding its market reach. The company is focused on transitioning more customers to its cloud solutions, which typically yield higher margins compared to traditional software sales.
Sage Group Earnings Call Summary
Earnings Call Date:May 15, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 19, 2025
Earnings Call Sentiment Positive
The earnings call highlights significant achievements in revenue growth, margin expansion, and product development, particularly in cloud services and Sage Intacct. The company maintains a strong cash position and continues to innovate with AI-driven solutions like Sage Copilot. However, macroeconomic uncertainty and a slight deceleration in recurring revenue growth pose challenges.Q2-2025 Updates
Positive Updates
Strong Revenue Growth
Sage achieved total revenue growth of 9%, with recurring revenue growing by 10%.
Operating Margin Expansion
Operating profit margin increased to 23.2%, an expansion of 140 basis points.
EPS Increase
Earnings Per Share (EPS) increased by 17%.
Cash Conversion
The company delivered cash conversion of 115%, driven by growth in subscription revenue.
Cloud Product Growth
Sage Business Cloud revenue increased by 13%, with cloud native revenue up 22%.
Regional Performance
North America delivered revenue growth of 11%, UKIA grew by 9%, and Europe by 8%.
Sage Intacct Growth
In the UKIA region, Sage Intacct's revenue increased by over 60%.
Sage Copilot Success
Sage Copilot is driving productivity and insights, available to 40,000 customers in the UK.
Share Buyback Program
Announced a 200 million extension to the share buyback program.
Negative Updates
Macroeconomic Uncertainty
The company faces a volatile and uncertain macroeconomic environment.
Recurring Revenue Growth Deceleration
Recurring revenue organic growth decelerated to around 9% in the second quarter.
Company Guidance
The recent call provided guidance for Sage's financial outlook, emphasizing strong performance in the first half of the fiscal year 2025. Key metrics highlighted included a total revenue growth of 9%, with an 11% increase in annual recurring revenue (ARR), showcasing robust sales momentum. The operating profit margin expanded by 140 basis points to 23.2%, driving a 17% rise in earnings per share (EPS) and a 7% increase in the interim dividend to 7.45 pence. The company maintained a leverage ratio of 1.5, indicating a solid financial position. Looking ahead, Sage expects organic revenue growth for FY25 to be 9% or above, with operating margins trending upwards, supported by efficient scaling and disciplined cost management. The company is also focusing on AI-driven innovations, particularly through Sage Copilot, which aims to enhance productivity and decision-making for small and mid-sized businesses.Sage Group Financial Statement Overview
Summary
Sage Group exhibits a strong financial profile with consistent revenue growth, high profitability margins, and robust cash flow generation. The Income Statement score is high due to increasing revenue and profitability, while the Balance Sheet reflects a solid position despite moderate debt reliance. Cash Flow is excellent, indicating strong cash generation. Overall, the company's financials suggest it is well-positioned for sustainable growth, with potential risks mitigated by strong operational performance.Income Statement
The company shows a strong financial performance with increasing revenue and improved profitability. The Gross Profit Margin is high at 92.82%, indicating effective cost management. A healthy Net Profit Margin of 13.85% and a Revenue Growth Rate of 6.77% from the previous year highlight the company's growth trajectory. The EBIT and EBITDA Margins are robust at 19.38% and 24.22%, respectively, showcasing operational efficiency.86
Very Positive
Balance Sheet
The balance sheet reflects a solid financial position with a Debt-to-Equity Ratio of 1.14, indicating manageable leverage. The Return on Equity is strong at 29.56%, reflecting good returns on shareholders' investments. However, the Equity Ratio of 30.05% suggests a moderate reliance on debt financing, which could pose a risk if not managed carefully.75
Positive
Cash Flow
The cash flow statement indicates strong cash generation, with a significant Free Cash Flow Growth Rate of 24.38%. The Operating Cash Flow to Net Income Ratio is excellent at 1.52, suggesting efficient cash conversion from earnings. The Free Cash Flow to Net Income Ratio is also solid at 1.41, underscoring the company's ability to generate free cash flow relative to net income.82
Very Positive
| Breakdown | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.33B | 2.18B | 1.95B | 1.85B | 1.90B |
| Gross Profit | 2.16B | 2.03B | 1.81B | 1.72B | 1.78B |
| EBITDA | 565.00M | 456.00M | 464.00M | 458.00M | 538.00M |
| Net Income | 323.00M | 211.00M | 260.00M | 285.00M | 310.00M |
Balance Sheet | |||||
| Total Assets | 3.64B | 3.94B | 3.90B | 3.33B | 3.71B |
| Cash, Cash Equivalents and Short-Term Investments | 508.00M | 696.00M | 489.00M | 553.00M | 831.00M |
| Total Debt | 1.25B | 1.26B | 1.22B | 814.00M | 990.00M |
| Total Liabilities | 2.54B | 2.53B | 2.50B | 2.22B | 2.06B |
| Stockholders Equity | 1.09B | 1.41B | 1.40B | 1.11B | 1.65B |
Cash Flow | |||||
| Free Cash Flow | 454.00M | 365.00M | 233.00M | 320.00M | 366.00M |
| Operating Cash Flow | 491.00M | 387.00M | 285.00M | 376.00M | 406.00M |
| Investing Cash Flow | -41.00M | -36.00M | -284.00M | 62.00M | 179.00M |
| Financing Cash Flow | -610.00M | -114.00M | -127.00M | -694.00M | -88.00M |
Sage Group Technical Analysis
Negative
58.21
Price Trends
61.06
Negative
64.10
Negative
63.83
Negative
Market Momentum
-0.63
Negative
37.24
Neutral
9.82
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SGPYY, the sentiment is Negative. The current price of 58.21 is below the 20-day moving average (MA) of 58.61, below the 50-day MA of 61.06, and below the 200-day MA of 63.83, indicating a bearish trend. The MACD of -0.63 indicates Negative momentum. The RSI at 37.24 is Neutral, neither overbought nor oversold. The STOCH value of 9.82 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SGPYY.
Sage Group Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $21.46B | 27.68 | 11.63% | 1.16% | 6.75% | 15.99% | |
77 Outperform | $12.59B | 29.43 | 31.85% | 0.69% | 10.21% | -10.56% | |
75 Outperform | $9.03B | 40.75 | 18.41% | ― | 13.74% | 10.99% | |
72 Outperform | $12.79B | 58.96 | 79.34% | ― | 6.13% | 9.17% | |
68 Neutral | $13.72B | 32.26 | 36.79% | 1.91% | 9.34% | 34.98% | |
65 Neutral | $15.90B | 66.89 | 21.88% | 0.52% | 10.45% | -32.43% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
SGPYY
Sage Group
58.21
4.03
7.44%
MANH
Manhattan Associates
207.67
-73.71
-26.20%
PAYC
Paycom
218.17
52.67
31.82%
PCTY
Paylocity
162.65
-2.32
-1.41%
DOCU
DocuSign
82.14
20.05
32.29%
BSY
Bentley Systems
51.98
1.46
2.89%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.