Update shared on 01 Dec 2025
Fair value Decreased 1.89%Analysts have revised Sage Group's price target downward from £13.49 to £13.23 per share. This reflects a modest reduction as they incorporate mixed views on growth prospects and recent updates to revenue and discount rate assumptions.
Analyst Commentary
Analyst sentiment toward Sage Group reflects a mix of optimism about the company’s longer-term strategy and valuation prospects, paired with concerns around short-term growth pressures and risk factors.
Bullish Takeaways
- Bullish analysts highlight Sage Group's strong fiscal 2025 results and improved guidance for fiscal 2026 as evidence of durable business performance.
- There is confidence in Sage’s continuing ability to upgrade forecasts, which they say supports the potential for further upward adjustments in consensus estimates.
- Shares are viewed by some as undervalued relative to Sage’s growth model and execution track record.
- Resilience in revenue streams and a track record of delivering upgrades contribute positively to the bullish valuation case.
Bearish Takeaways
- Bearish analysts cite concern about slowing annual recurring revenue (ARR) growth, which creates downward pressure on consensus expectations.
- The magnitude of risk is considered by some to be underestimated. Analysts note that even slight deceleration in key growth metrics can justify cautious positioning.
- Recent downward price target revisions reflect a more conservative view on near-term growth and underlying business momentum.
- Ongoing debate around fundamental valuation metrics underscores lingering uncertainty over Sage’s growth trajectory and its sustainability.
What's in the News
- The Sage Group plc has proposed a final dividend of 14.40 pence for the financial year ending September 30, 2025, pending approval at the AGM in February 2026. (Key Developments)
- New earnings guidance for fiscal year 2026 projects organic total revenue growth of 9% or above. (Key Developments)
- The Board has authorized a share buyback program, with plans to repurchase up to £300 million in shares through March 2026. (Key Developments)
- Sage announced the UK’s first AI-powered MTD for Income Tax Agent, designed to automate compliance and administration for accountants ahead of the 2026 digital records deadline. (Key Developments)
Valuation Changes
- Consensus Analyst Price Target has decreased slightly from £13.49 to £13.23 per share.
- The Discount Rate has risen marginally, moving from 9.13% to 9.16%.
- Revenue Growth projections have increased from 8.53% to 8.85%.
- Net Profit Margin has remained effectively unchanged, shifting slightly from 17.56% to 17.56%.
- The Future P/E ratio has risen noticeably, from 29.04x to 31.73x.
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