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Sage Group plc (GB:SGE)
LSE:SGE
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Sage Group plc (SGE) AI Stock Analysis

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GB:SGE

Sage Group plc

(LSE:SGE)

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Outperform 78 (OpenAI - 4o)
Rating:78Outperform
Price Target:
1,318.00p
▲(12.55% Upside)
Sage Group plc's overall stock score of 78 reflects its strong financial performance and positive earnings call, which highlight robust revenue growth and strategic investments in AI and cloud solutions. Technical analysis indicates bullish momentum, although valuation metrics suggest the stock is relatively expensive. The company's resilience in the face of macroeconomic challenges further supports its favorable outlook.
Positive Factors
Revenue Growth
Sage's robust revenue growth, driven by its subscription model, indicates strong market demand and a reliable income stream, enhancing long-term stability.
Cash Flow Generation
Strong cash flow generation supports Sage's ability to invest in growth opportunities and withstand economic fluctuations, ensuring financial resilience.
Investment in AI and Cloud Solutions
Strategic investments in AI and cloud solutions position Sage as a leader in digital transformation, enhancing its competitive edge and market relevance.
Negative Factors
Macroeconomic Volatility
Macroeconomic volatility poses risks to Sage's operations, potentially impacting demand and financial performance, requiring adaptive strategies.
Intacct's International Growth Lag
Slower international growth for Sage Intacct may limit global market expansion, affecting overall revenue potential and competitive positioning.
Slight Revenue Growth Deceleration
A deceleration in recurring revenue growth could signal market saturation or increased competition, impacting long-term growth trajectories.

Sage Group plc (SGE) vs. iShares MSCI United Kingdom ETF (EWC)

Sage Group plc Business Overview & Revenue Model

Company DescriptionSage Group plc (SGE) is a leading provider of business management software and services, primarily focused on serving small and medium-sized enterprises (SMEs) across various sectors. The company offers a range of products that include accounting, payroll, and enterprise resource planning (ERP) solutions, delivered through both cloud-based platforms and on-premise software. Sage is known for its commitment to providing seamless integration and user-friendly interfaces, catering to the evolving needs of businesses in an increasingly digital economy.
How the Company Makes MoneySage Group generates revenue primarily through the sale of software licenses, subscription services, and support and maintenance contracts. The company's revenue model is predominantly subscription-based, with a significant portion of its earnings derived from recurring revenue streams associated with cloud services and software-as-a-service (SaaS) offerings. Key revenue streams include direct sales of its software products, ongoing subscription fees for cloud-based services, and additional services such as training, consulting, and technical support. Sage also engages in partnerships with various organizations, including financial institutions and technology providers, to enhance its product offerings and expand its market reach, contributing to its overall earnings.

Sage Group plc 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 reflects a strong financial performance characterized by significant revenue and profit growth, robust cash flow, and strategic advancements in cloud and AI solutions. Despite facing macroeconomic uncertainties, Sage has demonstrated resilience and continued investment in innovation. The positive aspects significantly outweigh the few challenges noted, particularly the macroeconomic environment and slower international growth for some products.
Q2-2025 Updates
Positive Updates
Strong Revenue Growth
Total revenue growth of 9%, driven by a subscription-based model. ARR increased by 11% to 2.5 billion.
Operating Profit Margin Expansion
Operating profit margin increased to 23.2%, an expansion of 140 basis points, leading to a 17% increase in EPS.
Robust Cash Flow Generation
Cash conversion rate of 115%, generating 330 million from underlying operations and free cash flow of 246 million.
Sage Business Cloud Growth
Sage Business Cloud revenue increased by 13%, with cloud native revenue up by 22%, driven by Sage Intacct.
Regional Performance Highlights
North America revenue growth of 11%, UKIA revenue increased by 9%, and strong growth in Europe and Africa/APAC regions.
Investment in AI and Cloud Solutions
Sage Copilot delivering productivity and insights; expansion of cloud solutions and network services like accounts payable automation.
Negative Updates
Macroeconomic Volatility
Acknowledgment of volatile and uncertain macroeconomic conditions affecting the broader business environment.
Intacct's International Growth Lag
Outside the US, while showing growth, Sage Intacct's progress in Continental Europe is noted as slower but with future potential.
Slight Revenue Growth Deceleration
Recurring revenue growth in the second quarter noted to decelerate slightly to around 9%.
Company Guidance
During the call, Sage reported strong financial performance for the first half of the fiscal year 2025, characterized by a 9% total revenue growth and an 11% increase in Annualized Recurring Revenue (ARR) to £2.5 billion. The company achieved an operating profit margin of 23.2%, marking a 140 basis-point improvement from the previous period, and a 17% increase in Earnings Per Share (EPS). Sage's cash conversion rate stood at 115%, supported by disciplined cost control and efficient operating leverage. Regionally, North America experienced an 11% revenue growth, while UK & Ireland (UKIA) and Europe saw 9% and 8% growth, respectively. Sage's cloud solutions, particularly Sage Intacct and Sage Business Cloud, contributed significantly to this growth. The company reiterated its guidance for the full year, expecting organic revenue growth of 9% or more, with operating margins trending upwards. Sage's strategic focus on AI innovation, particularly through Sage Copilot, aims to enhance productivity and decision-making for small and mid-sized businesses.

Sage Group plc Financial Statement Overview

Summary
Sage Group plc demonstrates strong financial health with impressive profit margins and cash flow metrics. The company shows a robust operational efficiency with a gross profit margin of 92.8% and a net profit margin of 13.9%. Revenue growth is positive at 6.8%, and the company maintains a strong return on equity of 29.6%. However, moderate financial leverage is noted with a debt-to-equity ratio of 1.14.
Income Statement
85
Very Positive
The company shows a strong financial performance with a gross profit margin of 92.8% and a net profit margin of 13.9% for 2024. Revenue growth from 2023 to 2024 was 6.8%, indicating a positive trend. The EBIT margin improved to 19.4%, and the EBITDA margin was 24.2%, reflecting robust operational efficiency.
Balance Sheet
70
Positive
The debt-to-equity ratio stands at 1.14, indicating moderate leverage. The return on equity (ROE) is 29.6%, showing strong profitability relative to equity. However, the equity ratio of 30% suggests a moderate reliance on debt, which could pose some financial risk.
Cash Flow
80
Positive
There was a significant free cash flow growth rate of 24.4% from 2023 to 2024. The operating cash flow to net income ratio is 1.52, and the free cash flow to net income ratio is 1.41, both indicating strong cash generation relative to earnings.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.80B2.33B2.18B1.95B1.85B1.90B
Gross Profit1.62B2.16B2.03B1.71B1.63B1.65B
EBITDA449.00M565.00M434.00M432.00M461.00M525.00M
Net Income257.00M323.00M211.00M260.00M285.00M310.00M
Balance Sheet
Total Assets3.83B3.64B3.94B3.90B3.33B3.71B
Cash, Cash Equivalents and Short-Term Investments574.00M508.00M696.00M489.00M553.00M831.00M
Total Debt1.56B1.25B1.26B1.22B814.00M990.00M
Total Liabilities3.03B2.54B2.53B2.50B2.22B2.06B
Stockholders Equity799.00M1.09B1.41B1.40B1.11B1.65B
Cash Flow
Free Cash Flow386.50M454.00M365.00M234.00M321.00M369.00M
Operating Cash Flow414.00M491.00M387.00M286.00M377.00M409.00M
Investing Cash Flow-72.00M-41.00M-36.00M-285.00M61.00M176.00M
Financing Cash Flow-304.00M-610.00M-114.00M-127.00M-694.00M-88.00M

Sage Group plc Technical Analysis

Technical Analysis Sentiment
Positive
Last Price1171.00
Price Trends
50DMA
1111.74
Positive
100DMA
1160.63
Positive
200DMA
1199.83
Negative
Market Momentum
MACD
13.61
Positive
RSI
60.29
Neutral
STOCH
54.52
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 1171 is above the 20-day moving average (MA) of 1148.05, above the 50-day MA of 1111.74, and below the 200-day MA of 1199.83, indicating a neutral trend. The MACD of 13.61 indicates Positive momentum. The RSI at 60.29 is Neutral, neither overbought nor oversold. The STOCH value of 54.52 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

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
£10.98B32.9836.78%1.79%7.69%32.91%
74
Outperform
£1.12B33.1224.12%3.03%-3.96%-26.93%
68
Neutral
£669.12M23.1362.38%3.38%18.44%33.73%
63
Neutral
£865.12M1,069.002.53%18.75%-93.75%
62
Neutral
£588.04M71.111.40%1.85%1.94%
61
Neutral
$37.18B12.37-10.20%1.83%8.50%-7.62%
59
Neutral
£457.87M-18.721.99%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:SGE
Sage Group plc
1,171.00
196.98
20.22%
GB:GBG
GB Group plc
237.50
-103.86
-30.43%
GB:KNOS
Kainos Group plc
938.50
220.83
30.77%
GB:NCC
NCC Group plc
151.00
3.06
2.07%
GB:ALFA
Alfa Financial Software plc
227.50
12.79
5.96%
GB:TRST
Trustpilot Group Plc
199.00
-52.00
-20.72%

Sage Group plc Corporate Events

Regulatory Filings and Compliance
Sage Group Announces Total Voting Rights Update
Neutral
Sep 30, 2025

Sage Group plc announced its total exercisable voting rights as of 30 September 2025, amounting to 963,420,620. This figure is crucial for shareholders to determine their notification requirements under the Financial Conduct Authority’s Disclosure and Transparency Rules, impacting how they manage their interests in the company.

The most recent analyst rating on (GB:SGE) stock is a Buy with a £1320.00 price target. To see the full list of analyst forecasts on Sage Group plc stock, see the GB:SGE Stock Forecast page.

Executive/Board Changes
Sage Group Announces Key Leadership Appointment
Positive
Sep 15, 2025

Sage Group plc has announced the appointment of Jonathan Howell as an independent Non-executive Director and Chair of the Audit Committee at Whitbread PLC, effective from January 1, 2026. This strategic appointment may enhance Sage’s industry positioning by strengthening its governance and potentially influencing its stakeholder relationships.

The most recent analyst rating on (GB:SGE) stock is a Buy with a £1500.00 price target. To see the full list of analyst forecasts on Sage Group plc stock, see the GB:SGE Stock Forecast page.

Other
Sage Group’s Executive Exercises Share Options, Enhancing Stakeholder Alignment
Positive
Aug 20, 2025

Sage Group plc announced that Amanda Cusdin, Chief People Officer and member of the Executive Leadership Team, exercised options over 1,013 ordinary shares at an option price of £5.33. This transaction, part of The Sage Save and Share Plan, results in Cusdin holding a total of 154,881 ordinary shares. This move reflects the company’s commitment to aligning its leadership’s interests with shareholder value, potentially impacting stakeholder confidence positively.

The most recent analyst rating on (GB:SGE) stock is a Buy with a £1319.00 price target. To see the full list of analyst forecasts on Sage Group plc stock, see the GB:SGE Stock Forecast page.

Business Operations and Strategy
Sage Executives Acquire Shares, Signaling Confidence in Growth
Positive
Aug 4, 2025

Sage Group plc announced that two of its senior executives, Aaron Harris and Walid Abu-Hadba, have purchased ordinary shares under the Sage Colleague Share Purchase Plan. This move reflects the executives’ confidence in the company’s growth and aligns with Sage’s strategy to engage its leadership in its financial success, potentially enhancing stakeholder trust and market positioning.

The most recent analyst rating on (GB:SGE) stock is a Buy with a £15.00 price target. To see the full list of analyst forecasts on Sage Group plc stock, see the GB:SGE Stock Forecast page.

Business Operations and Strategy
Sage Group Executives Acquire Share Purchase Rights
Positive
Aug 1, 2025

Sage Group plc announced that two of its executives, Aaron Harris and Walid Abu-Hadba, have acquired rights to purchase ordinary shares under the company’s Colleague Share Purchase Plan (CSPP). This plan, aimed at Sage’s US employees, allows participants to purchase shares at a discounted price at the end of a six-month period. This move signifies Sage’s commitment to employee investment and aligns with its strategy to enhance stakeholder engagement and retention.

The most recent analyst rating on (GB:SGE) stock is a Buy with a £14.00 price target. To see the full list of analyst forecasts on Sage Group plc stock, see the GB:SGE Stock Forecast page.

Regulatory Filings and Compliance
Sage Group Announces Updated Voting Rights Total
Neutral
Jul 31, 2025

Sage Group plc announced that its total exercisable voting rights as of July 31, 2025, are 963,428,228. This figure is crucial for shareholders to determine their notification requirements under the Financial Conduct Authority’s Disclosure and Transparency Rules, impacting how they manage their interests in the company.

The most recent analyst rating on (GB:SGE) stock is a Buy with a £15.00 price target. To see the full list of analyst forecasts on Sage Group plc stock, see the GB:SGE Stock Forecast page.

Other
Sage Group’s Chief Product Officer Increases Stake in Company
Positive
Jul 31, 2025

Sage Group plc announced that Walid Abu-Hadba, its Chief Product Officer, purchased 600 ordinary shares at a price of £12.5734 per share on 30 July 2025. This transaction, conducted on the London Stock Exchange, increases Abu-Hadba’s total shareholding to 333,302 ordinary shares, reflecting a continued commitment to the company and potentially signaling confidence in its future prospects.

The most recent analyst rating on (GB:SGE) stock is a Buy with a £15.00 price target. To see the full list of analyst forecasts on Sage Group plc stock, see the GB:SGE Stock Forecast page.

Business Operations and StrategyStock Buyback
Sage Group Completes £200 Million Share Buyback Program
Positive
Jul 30, 2025

Sage Group plc has completed its share buyback program, purchasing a total of 16,082,393 ordinary shares for approximately £200 million. The buyback, finalized on 30 July 2025, is part of Sage’s strategy to enhance shareholder value by reducing the number of outstanding shares, potentially increasing earnings per share and market confidence.

The most recent analyst rating on (GB:SGE) stock is a Sell with a £9.85 price target. To see the full list of analyst forecasts on Sage Group plc stock, see the GB:SGE Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Sage Group Reports 9% Revenue Growth Amid Strong Cloud Performance
Positive
Jul 30, 2025

Sage Group plc reported a 9% increase in total revenue to £1,862 million for the first nine months of 2025, driven by strong growth across all regions and its Sage Business Cloud portfolio. The company highlighted significant performance in North America and the UKIA region, with notable growth in cloud-native revenue and software subscriptions, despite facing foreign exchange headwinds. Sage’s continued focus on cloud and AI-powered solutions has bolstered customer success and confidence in its growth strategy.

The most recent analyst rating on (GB:SGE) stock is a Buy with a £15.00 price target. To see the full list of analyst forecasts on Sage Group plc stock, see the GB:SGE Stock Forecast page.

Stock Buyback
Sage Group Executes Share Buyback to Enhance Shareholder Value
Positive
Jul 29, 2025

Sage Group plc announced the repurchase of 440,255 of its ordinary shares as part of its ongoing share buyback program, which is set to conclude by the end of July 2025. This strategic move is likely aimed at enhancing shareholder value and optimizing the company’s capital structure, reflecting Sage’s confidence in its financial health and future prospects.

The most recent analyst rating on (GB:SGE) stock is a Buy with a £15.00 price target. To see the full list of analyst forecasts on Sage Group plc stock, see the GB:SGE Stock Forecast page.

Stock Buyback
Sage Group Executes Share Buyback to Enhance Shareholder Value
Positive
Jul 28, 2025

Sage Group plc has executed a share buyback transaction, purchasing 450,114 of its ordinary shares through J.P. Morgan Securities plc as part of a previously announced program. The buyback, which will conclude by the end of July 2025, aims to enhance shareholder value by reducing the number of shares in circulation, thus potentially increasing the value of remaining shares.

The most recent analyst rating on (GB:SGE) stock is a Buy with a £15.00 price target. To see the full list of analyst forecasts on Sage Group plc stock, see the GB:SGE Stock Forecast page.

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.Date of analysis: Oct 23, 2025