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Sage Group plc
(LSE:SGE)
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Rating:77Outperform
Price Target:
1,116.00 p
▲(1.04% Upside)
Action:Reiterated
Date:08/21/26
The score is driven primarily by strong underlying financial performance (high margins, improved profitability, and solid cash generation) and a notably positive earnings update with upgraded FY26 growth guidance and ongoing margin expansion. Offsetting factors are a relatively full valuation (P/E 26.49) and overbought technical signals (RSI 72, Stoch 93) that raise near-term risk, alongside leverage trending higher.
Positive Factors
Recurring cloud revenue and retention
Sage’s subscription-heavy model provides visibility and resilience through recurring customer revenue. Strong ARR growth and renewal performance indicate durable product dependence, while pricing and retention support continued expansion without relying solely on new customer wins.
Negative Factors
Higher leverage and finance costs
Higher leverage reduces financial flexibility and increases the sensitivity of earnings and cash allocation to financing costs. Although cash generation remains strong, debt near the top of the target range could constrain investment or shareholder returns if operating conditions weaken.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring cloud revenue and retention
Sage’s subscription-heavy model provides visibility and resilience through recurring customer revenue. Strong ARR growth and renewal performance indicate durable product dependence, while pricing and retention support continued expansion without relying solely on new customer wins.
Read all positive factors
Sage Group plc (SGE) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£8.86B
Dividend Yield2.24%
Average Volume (3M)3.04M
Price to Earnings (P/E)24.4
Beta (1Y)0.71
Revenue Growth8.75%
EPS Growth15.70%
CountryUK
Employees11,094
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.41
Shares Outstanding905,569,600
10 Day Avg. Volume2,344,947
30 Day Avg. Volume3,044,789
Financial Highlights & Ratios
PEG Ratio1.54
Price to Book (P/B)14.94
Price to Sales (P/S)4.28
P/FCF Ratio21.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
£1,100.63Price Target Upside-0.35% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering8
EPS Forecast (FY)0.58
Revenue Forecast (FY)£3.02B
Sage Group plc Business Overview & Revenue Model
Company Description
The Sage Group plc offers technology-driven solutions and services designed for small and medium-sized enterprises across North America, Northern Europe, and globally. Their product portfolio includes a range of cloud-native solutions, such as Sag...
How the Company Makes Money
Sage primarily makes money by selling access to its business software through recurring subscriptions, especially for its cloud offerings, where customers typically pay monthly or annual fees to use applications for accounting, payroll, and financ...
Sage Group plc 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 conveyed a strongly positive operational and financial performance: double-digit revenue and ARR growth, margin expansion, robust cash generation, meaningful AI adoption at scale, and an upgraded FY26 revenue outlook (above 9%). Key challenges are manageable: higher finance costs and leverage at the top of target range, uneven regional growth (Central Europe lagging), modest near-term direct AI monetization, heavy go-to-market spend, and tougher H2 comparators. On balance the positives — particularly recurring revenue strength, margin improvement, cash generation and tangible AI traction — materially outweigh the negatives.Positive Updates
Strong Revenue and ARR Growth
Total revenue grew 11% in H1 FY26. Annual recurring revenue (ARR) increased by ~GBP 275m to GBP 2.7bn, up 11% year-on-year.
Negative Updates
Higher Net Finance Costs and Leverage
Net finance costs increased following recent debt issuance. Reported leverage ratio ~2x, at the upper end of the stated 1–2x target range.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Revenue and ARR Growth
Total revenue grew 11% in H1 FY26. Annual recurring revenue (ARR) increased by ~GBP 275m to GBP 2.7bn, up 11% year-on-year.
Read all positive updates
Company Guidance
Guidance for FY‑26 is that Sage now expects organic revenue growth to be above 9% and operating margins to continue trending upwards; management framed that outlook as supported by a strong H1 showing—total revenue +11%, ARR up ~£275m to ~£2.7bn (+11%), renewal‑rate by value 102% (pricing contribution ~5.5%), new customer acquisition £200m (from £190m), Sage Business Cloud +15% (cloud‑native +25%), 97% recurring revenue and 84% subscription penetration—with margin and cash strength shown by operating margin 23.9% (+80bps), operating profit £326m (+15%), EPS +16% to 23.7p, interim dividend +8% to 8.05p, cash from operations £378m, cash conversion 116%, free cash flow £241m, available liquidity £1.1bn and leverage around 2x (target range 1–2x); management also noted product‑level momentum (e.g., U.S. Intacct ARR >20%, international ARR strong) and ongoing investments (R&D ~15% of revenue, G&A ~8%, S&M ~40%) alongside £600m buyback authorization (≈£350m completed H1) to underline the realism of the above‑9% growth target.Sage Group plc Financial Statement Overview
Summary
Income Statement
85
Very Positive
Balance Sheet
78
Positive
Cash Flow
80
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.63B | 2.51B | 2.33B | 2.18B | 1.95B | 1.85B |
| Gross Profit | 2.35B | 2.24B | 2.07B | 2.03B | 1.71B | 1.63B |
| EBITDA | 666.00M | 631.00M | 565.00M | 434.00M | 465.00M | 461.00M |
| Net Income | 385.00M | 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 | 518.00M | 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 | 220.00M | 720.00M | 1.09B | 1.41B | 1.40B | 1.11B |
Cash Flow | ||||||
| Free Cash Flow | 507.00M | 498.00M | 454.00M | 365.00M | 234.00M | 321.00M |
| Operating Cash Flow | 538.00M | 539.00M | 491.00M | 387.00M | 286.00M | 377.00M |
| Investing Cash Flow | -142.00M | -127.00M | -41.00M | -36.00M | -285.00M | 61.00M |
| Financing Cash Flow | -446.00M | -521.00M | -610.00M | -114.00M | -127.00M | -694.00M |
Sage Group plc Technical Analysis
Positive
1104.50
Price Trends
1021.51
Negative
931.69
Positive
915.10
Positive
Market Momentum
-9.36
Positive
50.10
Neutral
61.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SGE, the sentiment is Positive. The current price of 1104.5 is above the 20-day moving average (MA) of 994.47, above the 50-day MA of 1021.51, and above the 200-day MA of 915.10, indicating a neutral trend. The MACD of -9.36 indicates Positive momentum. The RSI at 50.10 is Neutral, neither overbought nor oversold. The STOCH value of 61.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:SGE.
Sage Group plc Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | £461.21M | 16.73 | 53.53% | 6.14% | 7.66% | -6.78% | |
77 Outperform | £8.86B | 24.44 | 81.91% | 2.24% | 8.75% | 15.70% | |
73 Outperform | £1.40B | 34.40 | 41.45% | 2.46% | 17.39% | 24.79% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | £141.21M | 44.54 | 6.17% | 2.01% | -9.87% | -22.86% | |
59 Neutral | £225.36M | 48.47 | 4.85% | 3.20% | ― | ― |
* Technology Sector Average
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Sage Group plc Corporate Events
Regulatory Filings and Compliance
Sage Group Updates Market on Total Exercisable Voting Rights
Neutral
Sep 30, 2026
Sage Group plc has disclosed its total voting rights as at 30 September 2026, reporting an issued share capital of 959,080,955 ordinary shares, with 53,511,384 shares held in treasury and 5,021,344 shares held in an employee benefit trust. As a re...
Business Operations and StrategyExecutive/Board Changes
Sage Grants Long-Term Share Awards to Senior Executives
Positive
Sep 30, 2026
Sage Group plc has granted new conditional share awards under its Long-Term Incentive Plan to three members of its executive leadership team. Chief Product Officer Krish Vitaldevara, Chief Strategy Officer Anand Swaminathan and Chief Commercial Of...
Other
Sage Executives Boost Holdings Through Save and Share Option Exercise
Positive
Sep 30, 2026
Sage Group plc has disclosed that two members of its Executive Leadership Team have increased their holdings in the company through an employee share scheme. Chief People Officer Amanda Cusdin and Chief Brand and Corporate Affairs Officer Amy Laws...
Business Operations and StrategyDelistings and Listing Changes
Sage sets make-whole terms for early redemption of €500m bond
Positive
Sep 23, 2026
Sage Group has determined the make-whole amount for the early redemption of its EUR500 million 3.820% notes due February 2028, setting the payout at EUR1,005.403 per EUR1,000 of nominal value. Noteholders will also receive EUR23.55 per EUR1,000 in...
Business Operations and StrategyDelistings and Listing Changes
Sage to Redeem EUR500m Notes and Cancel London Listing
Neutral
Sep 11, 2026
Sage Group plc has notified holders of its EUR500 million 3.820% notes due February 2028 that it will exercise its issuer call option to redeem all outstanding notes on 28 September 2026. The redemption will be made at the make-whole optional rede...
Business Operations and StrategyPrivate Placements and FinancingRegulatory Filings and Compliance
Sage Admits €500 Million Bond to London Stock Exchange Main Market
Positive
Sep 10, 2026
The Sage Group plc has admitted €500 million of 4.2805% notes due March 10, 2032 to trading on the London Stock Exchange’s main market under its £3 billion Euro Medium Term Note Programme. The documentation for the issue, includin...
Executive/Board ChangesRegulatory Filings and Compliance
Sage Group Discloses Executive Share Award Vesting and Subsequent Sale
Neutral
Sep 8, 2026
The Sage Group plc has disclosed a director dealing involving Chief Growth Officer Simon Longbottom following the vesting of a restricted share award under the company’s Long-Term Incentive Plan. Longbottom became beneficially entitled to 8,...
Business Operations and StrategyPrivate Placements and Financing
Sage Raises €500m in Oversubscribed Bond to Bolster SMB Tech Strategy
Positive
Sep 8, 2026
Sage Group plc has successfully priced a €500 million senior fixed-rate bond with a 5.5-year tenor, carrying an annual coupon of 4.2805 per cent and a BBB+ rating from SP. The notes, due in March 2032 and issued under Sage’s €3 b...
Business Operations and StrategyPrivate Placements and FinancingRegulatory Filings and Compliance
Sage updates £3bn EMTN documentation after FCA approval
Positive
Aug 28, 2026
The Sage Group plc, a leading provider of accounting, financial, HR and payroll technology for small and mid-sized businesses, continues to expand its AI-powered digital platforms that streamline finance and workforce processes. The company target...
Regulatory Filings and Compliance
Sage Group Updates Total Exercisable Voting Rights
Neutral
Aug 28, 2026
Sage Group plc has reported that as of 28 August 2026 its issued share capital stands at 959,080,955 ordinary shares, with 53,686,342 shares held in treasury and 6,762,690 shares held in an employee benefit trust. After excluding these holdings, t...
Business Operations and StrategyRegulatory Filings and Compliance
Sage Executives Exercise Share Options Under Save and Share Plan
Neutral
Aug 5, 2026
The Sage Group plc disclosed that Chief Executive Officer Steve Hare and Chief Commercial Officer Derk Bleeker have exercised share options under the company’s Save and Share Plan. Both executives acquired 2,608 ordinary shares at an option ...
Other
Sage CTO and Associate Boost Holdings Through Share Purchase Plan
Positive
Aug 4, 2026
The Sage Group plc has disclosed that Chief Technology Officer Aaron Harris and his closely associated person, Amy Cosgrove, have each purchased 549 ordinary shares in the company under the Sage Colleague Share Purchase Plan. The shares were acqui...
Business Operations and StrategyExecutive/Board ChangesRegulatory Filings and Compliance
Sage executives secure discounted share purchase rights under US colleague plan
Positive
Aug 3, 2026
The Sage Group plc disclosed that Chief Technology Officer Aaron Harris, Chief Product Officer Krishna Vitaldevara and a person closely associated with Harris, Amy Cosgrove, have each acquired rights to purchase ordinary shares under the company&#...
Regulatory Filings and Compliance
Sage Confirms 904.3 Million Exercisable Voting Rights After Capital Update
Neutral
Jul 31, 2026
As of 31 July 2026, The Sage Group plc reported an issued share capital of 959,080,955 ordinary shares, with 54,777,272 held in treasury and 6,762,690 held in an employee benefit trust. After excluding these shares, Sage confirmed that shareholder...
Business Operations and StrategyFinancial Disclosures
Sage posts double-digit revenue growth as AI-driven cloud offering scales
Positive
Jul 29, 2026
Sage reported an 11% rise in total revenue to £2,062m for the nine months to 30 June 2026, driven by strong demand from new and existing small and mid-sized business customers. Growth was broad-based across regions, with North America up 14%,...
DividendsRegulatory Filings and Compliance
Sage executives boost shareholdings through dividend reinvestment plan
Positive
Jul 15, 2026
Sage has reported automatic acquisitions of ordinary shares by several senior executives and a closely associated person under its Dividend Reinvestment Plan. Chief Executive Officer Steve Hare, Chief Financial Officer Jacqui Cartin and other PDMR...
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.