Sage Group (SGPYY) AI Stock Analysis

• Market Cap: $16.31B
• Dividend Yield: 1.15%
• Average Volume (3M): 6.85K
• Price to Earnings (P/E): 38.6
• Beta (1Y): 0.61
• Revenue Growth: 9.34%
• EPS Growth: 34.98%
• Country: US
• Employees: 10,740
• Sector: Technology
• Sector Strength: 86
• Industry: Software - Application
• EPS (TTM): 1.09
• Shares Outstanding: 242,871,300
• 10 Day Avg. Volume: 1,179
• 30 Day Avg. Volume: 6,854
• PEG Ratio: -1.47
• Price to Book (P/B): 20.27
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 70.90
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 78 Outperform
• Price Target: $75.00 ▲(9.33%Upside)

Sage Group's stock is supported by strong financial performance and positive earnings call highlights, including robust revenue growth and margin expansion. The technical analysis indicates a generally bullish trend, although valuation metrics suggest the stock might be somewhat overvalued. Despite macroeconomic uncertainties, the company's strategic initiatives and guidance reflect confidence in continued growth, resulting in a favorable overall stock score.

Sage Group Business Overview & Revenue Model

Company Description

The Sage Group plc, together with its subsidiaries, provides technology solutions and services for small and medium businesses in North America, Northern Europe, and internationally. It offers cloud native solutions, such as Sage Intacct, a cloud accounting software products and financial management solutions; Sage People, a cloud HR and people management solution; Sage Accounting, a solution for small businesses, accountants, and bookkeepers to remotely manage customer data, accounts, and people; Sage Payroll, a cloud-based payroll solution; and Sage HR, a HR management solution. The company also provides cloud connected and hybrid solutions, including Sage X3, a business management solution; and Sage 50cloud and Sage 200cloud that provides a range of cloud connected accounting solutions. The company was founded in 1981 and is based in Newcastle upon Tyne, the United Kingdom.

How the Company Makes Money

Sage Group generates revenue primarily through the sale of software subscriptions and licenses. The company's key revenue streams include recurring revenue from cloud-based solutions, which have been a focus of growth as businesses increasingly shift to digital and cloud environments. Sage also earns from maintenance and support contracts, professional services like training and implementation, and transactional fees from its payment processing solutions. Significant partnerships with other technology companies and financial institutions enhance its product offerings and expand its market reach, contributing to its earnings.

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.

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.

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.

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

• Technical Analysis Sentiment: Positive
• Last Price: 68.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SGPYY, the sentiment is Positive. The current price of 68.6 is above the 20-day moving average (MA) of 67.97, above the 50-day MA of 66.44, and above the 200-day MA of 61.52, indicating a bullish trend. The MACD of 0.69 indicates Positive momentum. The RSI at 56.54 is Neutral, neither overbought nor oversold. The STOCH value of 39.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SGPYY.

Sage Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BSY	81 Outperform	$15.97B	66.92	25.20%	0.53%	10.71%	-27.64%
MANH	78 Outperform	$11.98B	56.23	89.60%	―	9.18%	14.35%
SSNC	78 Outperform	$20.19B	25.48	12.34%	1.22%	6.92%	28.43%
SGPYY	78 Outperform	$16.31B	38.59	36.79%	1.15%	9.34%	34.98%
PCTY	71 Outperform	$9.92B	44.77	19.70%	―	14.63%	17.15%
PAYC	71 Outperform	$13.14B	32.44	24.99%	0.66%	9.86%	-14.34%
Sector *	63 Neutral	£571.22M	24.42	-6.00%	2.36%	3.52%	-29.29%