Sage Group (SGPYY)
OTHER OTC:SGPYY
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Sage Group
(OTC:SGPYY)
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Rating:78Outperform
Price Target:
$55.00
▼(-2.50% Downside)
Action:Reiterated
Date:05/21/26
The score is driven primarily by strong underlying financial profitability and a notably positive earnings update (upgraded growth guidance, expanding margins, and strong cash generation). Valuation looks reasonable (P/E ~14 with a 2.45% yield). Technicals are only moderately supportive due to weaker longer-term trend versus the 200-day average and leverage-related risk remains a key watch item.
Positive Factors
Recurring revenue strength
High recurring revenue and strong subscription penetration create predictable, sticky cash flows and lower churn sensitivity. This underpins durable ARR growth and smoother revenue visibility as legacy customers migrate to cloud, enabling long-term cross-sell and renewal economics.
Negative Factors
Elevated leverage
Leverage near the top of target and rising net finance costs reduce financial flexibility and increase refinancing risk. In a slower growth scenario or if cash conversion softens, elevated debt could constrain buybacks, M&A capacity and strategic agility over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring revenue strength
High recurring revenue and strong subscription penetration create predictable, sticky cash flows and lower churn sensitivity. This underpins durable ARR growth and smoother revenue visibility as legacy customers migrate to cloud, enabling long-term cross-sell and renewal economics.
Read all positive factors
Sage Group (SGPYY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$10.45B
Dividend Yield1.87%
Average Volume (3M)4.49K
Price to Earnings (P/E)21.4
Beta (1Y)0.58
Revenue Growth14.25%
EPS Growth21.57%
CountryUS
Employees10,740
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)1.64
Shares Outstanding226,932,890
10 Day Avg. Volume2,093
30 Day Avg. Volume4,488
Financial Highlights & Ratios
PEG Ratio1.29
Price to Book (P/B)14.95
Price to Sales (P/S)4.28
P/FCF Ratio22.95
Enterprise Value/Market Cap0.87
Enterprise Value/Revenue3.44
Enterprise Value/Gross Profit3.78
Enterprise Value/Ebitda13.59
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)2.69
Revenue Forecast (FY)$3.71B
Sage Group Business Overview & Revenue Model
Company Description
The Sage Group plc, operating through its various subsidiaries, specializes in providing technology solutions and services specifically tailored for small and medium-sized businesses (SMBs). The company maintains a substantial global presence, wit...
How the Company Makes Money
Sage primarily makes money by selling software and related services to businesses through recurring subscriptions and, to a lesser extent, licenses and support. The company’s largest revenue stream is subscription revenue from cloud and subscripti...
Sage Group Earnings Call Summary
Earnings Call Date:May 21, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 19, 2026
Earnings Call Sentiment Positive
The call presented a clearly positive operational and financial picture: double-digit revenue and ARR growth, expanding margins, strong cash flow and pronounced AI adoption and productivity benefits. The company upgraded guidance to above 9% organic growth and emphasized durable, platform-led momentum. Near-term risks include higher net finance costs, leverage at the top of target range, pockets of slower regional growth, high sales & marketing intensity and the fact that direct AI monetization is still modest. On balance, the strengths and measurable progress materially outweigh the challenges.Positive Updates
Strong Revenue and ARR Growth
Total revenue grew 11% year-on-year. Annual recurring revenue (ARR) increased by around GBP 275 million to GBP 2.7 billion, up ~11% at the half year.
Negative Updates
Higher Net Finance Costs and Elevated Leverage
Net finance costs increased following recent debt issuance. Leverage ratio stands at around 2x, at the upper end of the company target range (1–2x), which raises capital structure risk.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Revenue and ARR Growth
Total revenue grew 11% year-on-year. Annual recurring revenue (ARR) increased by around GBP 275 million to GBP 2.7 billion, up ~11% at the half year.
Read all positive updates
Company Guidance
Management guided FY‑26 organic revenue growth to be above 9% and said operating margins should continue to trend upwards (H1 margin was 23.9%, up 80bps), citing the strong H1 as the underpinning: total and recurring revenue +11%, ARR up ~£275m to £2.7bn (+11%), renewal rate by value 102%, new customer acquisition £200m (from £190m), operating profit £326m (+15%), EPS +16% to 23.7p, cash from operations £378m (cash conversion 116%) and free cash flow £241m; liquidity £1.1bn, leverage ~2x (upper end of 1–2x), £600m buyback announced (£350m completed) and interim dividend +8% to 8.05p. Management also pointed to supporting operational metrics—97% recurring revenue, subscription penetration 84%, Sage Business Cloud +15% (cloud‑native +25%), R&D ~15% of revenue, G&A ~8%, S&M ~40%—while cautioning the second half will lap tougher comps from Q4 FY‑25.Sage Group Financial Statement Overview
Summary
Income Statement
85
Very Positive
Balance Sheet
78
Positive
Cash Flow
70
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.65B | 2.51B | 2.33B | 2.18B | 1.95B | 1.85B |
| Gross Profit | 2.41B | 2.33B | 2.16B | 2.03B | 1.81B | 1.72B |
| EBITDA | 670.26M | 629.00M | 565.00M | 456.00M | 464.00M | 458.00M |
| Net Income | 387.50M | 369.00M | 323.00M | 211.00M | 260.00M | 285.00M |
Balance Sheet | ||||||
| Total Assets | 3.99B | 3.71B | 3.64B | 3.94B | 3.90B | 3.33B |
| Cash, Cash Equivalents and Short-Term Investments | 518.03M | 390.00M | 508.00M | 696.00M | 489.00M | 553.00M |
| Total Debt | 2.02B | 1.58B | 1.25B | 1.26B | 1.22B | 814.00M |
| Total Liabilities | 3.77B | 2.99B | 2.54B | 2.53B | 2.50B | 2.22B |
| Stockholders Equity | 220.01M | 720.00M | 1.09B | 1.41B | 1.40B | 1.11B |
Cash Flow | ||||||
| Free Cash Flow | 522.26M | 469.00M | 454.00M | 365.00M | 233.00M | 320.00M |
| Operating Cash Flow | 554.78M | 528.00M | 491.00M | 387.00M | 285.00M | 376.00M |
| Investing Cash Flow | -146.15M | -127.00M | -41.00M | -36.00M | -284.00M | 62.00M |
| Financing Cash Flow | -453.28M | -521.00M | -610.00M | -114.00M | -127.00M | -694.00M |
Sage Group Technical Analysis
Neutral
56.41
Price Trends
46.61
Negative
46.93
Negative
52.29
Negative
Market Momentum
-0.14
Positive
49.50
Neutral
37.31
Neutral
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 56.41 is above the 20-day moving average (MA) of 46.63, above the 50-day MA of 46.61, and above the 200-day MA of 52.29, indicating a bearish trend. The MACD of -0.14 indicates Positive momentum. The RSI at 49.50 is Neutral, neither overbought nor oversold. The STOCH value of 37.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 |
|---|---|---|---|---|---|---|---|
80 Outperform | $6.08B | 23.87 | 22.36% | ― | 11.31% | 16.71% | |
78 Outperform | $10.45B | 21.38 | 81.91% | 1.87% | 14.25% | 21.57% | |
78 Outperform | $8.74B | 40.67 | 78.22% | ― | 4.78% | 1.30% | |
76 Outperform | $9.18B | 29.31 | 15.65% | ― | 8.42% | -70.89% | |
74 Outperform | $6.56B | 14.97 | 31.03% | 0.94% | 9.37% | 23.47% | |
70 Outperform | $10.00B | 36.52 | 23.62% | 0.72% | 12.23% | 10.63% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
SGPYY
Sage Group
46.02
-20.10
-30.40%
MANH
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PAYC
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PCTY
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DOCU
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46.16
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BSY
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33.02
-14.45
-30.44%
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.