Sage Group (SGPYY) AI Stock Analysis

• Market Cap: $13.83B
• Dividend Yield: 1.87%
• Average Volume (3M): 4.49K
• Price to Earnings (P/E): 29.6
• Beta (1Y): 0.58
• Revenue Growth: 11.09%
• EPS Growth: 21.32%
• Country: US
• Employees: 10,740
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 1.21
• Shares Outstanding: 239,024,220
• 10 Day Avg. Volume: 2,093
• 30 Day Avg. Volume: 4,488
• PEG Ratio: 1.29
• Price to Book (P/B): 14.95
• Price to Sales (P/S): 4.28
• P/FCF Ratio: 22.95
• Enterprise Value/Market Cap: 0.95
• Enterprise Value/Revenue: 5.44
• Enterprise Value/Gross Profit: 5.87
• Enterprise Value/Ebitda: 21.94
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: $64.00 ▲(9.74% Upside)

Sage Group's overall stock score reflects its strong financial performance and positive earnings call, which highlight growth in cloud revenue and strategic innovation in AI. However, technical indicators suggest bearish momentum, and the stock's valuation appears high, which tempers the overall score.

Positive Factors

Cloud Revenue Growth

The significant growth in cloud revenue indicates strong demand for Sage's cloud solutions, enhancing its competitive position and supporting long-term revenue expansion.

AI and Innovation

Investments in AI and innovation, such as Sage CoPilot, position Sage to enhance product offerings and customer value, driving future growth and differentiation.

Strong Financial Performance

Consistent revenue and profit growth reflect effective business strategies and operational efficiency, supporting long-term financial stability and shareholder value.

Negative Factors

Reliance on Debt

A reliance on debt financing could pose risks if not managed carefully, potentially impacting financial flexibility and increasing vulnerability to economic fluctuations.

Decline in Free Cash Flow Growth

A decline in free cash flow growth may limit Sage's ability to invest in growth opportunities or return capital to shareholders, affecting long-term financial health.

Competitive Dynamics

Ongoing competitive challenges, particularly in the U.S. market, may pressure Sage's market share and pricing power, impacting its ability to sustain growth.

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 its software solutions and subscription services. The company operates on a subscription-based model, where customers pay recurring fees for access to its cloud-based products. Key revenue streams include software licenses, maintenance and support services, consulting services, and training programs. Sage also partners with various channel partners and resellers to extend its market reach, which contributes to its overall earnings. Additionally, the company may benefit from strategic alliances and integrations with other technology providers, enhancing its product offerings and driving customer acquisition.

Sage Group Financial Statement Overview

Summary

Sage Group shows strong financial health with consistent revenue growth, high profitability margins, and effective cash management. However, the reliance on debt and the recent decline in free cash flow growth are concerns.

Income Statement

Sage Group has demonstrated consistent revenue growth over the years, with a 3.76% increase in the most recent year. The company maintains strong profitability with a high gross profit margin of approximately 92.7% and a solid net profit margin of 14.7%. EBIT and EBITDA margins are also robust, indicating efficient operational management. However, the revenue growth rate has slowed compared to previous years, which could be a concern if the trend continues.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio of 2.19, indicating a balanced approach to leveraging. Return on equity is strong at 51.25%, reflecting effective use of shareholder funds to generate profits. The equity ratio stands at 19.39%, suggesting a reliance on debt financing, which could pose risks if not managed carefully.

Cash Flow

The cash flow statement reveals a decline in free cash flow growth, with a negative growth rate of -0.85%. However, the operating cash flow to net income ratio is healthy at 1.43, indicating strong cash generation relative to net income. The free cash flow to net income ratio is also favorable at 1.27, suggesting efficient cash management despite the recent decline in free cash flow growth.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.42B	2.51B	2.33B	2.18B	1.95B	1.85B
Gross Profit	2.25B	2.33B	2.16B	2.03B	1.81B	1.72B
EBITDA	601.00M	629.00M	565.00M	456.00M	464.00M	458.00M
Net Income	347.00M	369.00M	323.00M	211.00M	260.00M	285.00M
Balance Sheet
Total Assets	3.83B	3.71B	3.64B	3.94B	3.90B	3.33B
Cash, Cash Equivalents and Short-Term Investments	574.00M	390.00M	508.00M	696.00M	489.00M	553.00M
Total Debt	1.56B	1.58B	1.25B	1.26B	1.22B	814.00M
Total Liabilities	3.03B	2.99B	2.54B	2.53B	2.50B	2.22B
Stockholders Equity	799.00M	720.00M	1.09B	1.41B	1.40B	1.11B
Cash Flow
Free Cash Flow	473.00M	469.00M	454.00M	365.00M	233.00M	320.00M
Operating Cash Flow	531.00M	528.00M	491.00M	387.00M	285.00M	376.00M
Investing Cash Flow	-92.00M	-127.00M	-41.00M	-36.00M	-284.00M	62.00M
Financing Cash Flow	-305.00M	-521.00M	-610.00M	-114.00M	-127.00M	-694.00M

Sage Group Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 58.32
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SGPYY, the sentiment is Neutral. The current price of 58.32 is above the 20-day moving average (MA) of 57.47, below the 50-day MA of 58.85, and below the 200-day MA of 62.12, indicating a neutral trend. The MACD of 0.08 indicates Negative momentum. The RSI at 54.59 is Neutral, neither overbought nor oversold. The STOCH value of 81.22 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SGPYY.

Sage Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PAYC	76 Outperform	$9.03B	19.94	28.56%	0.94%	9.72%	-2.69%
MANH	75 Outperform	$10.56B	49.79	73.58%	―	4.10%	-0.21%
SGPYY	73 Outperform	$13.83B	29.60	36.79%	1.87%	11.09%	21.32%
PCTY	71 Outperform	$8.28B	38.13	20.42%	―	13.30%	2.80%
DOCU	71 Outperform	$13.95B	48.74	15.22%	―	8.45%	-69.85%
BSY	71 Outperform	$11.81B	47.00	24.16%	0.72%	11.12%	-26.24%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%