LSE:SGE

Stock Analysis Report

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Executive Summary

The Sage Group plc, together with its subsidiaries, provides technology solutions and services. More Details


Snowflake Analysis

Excellent balance sheet established dividend payer.


Similar Companies

Share Price & News

How has Sage Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SGE has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.6%

SGE

-1.7%

GB Software

-1.9%

GB Market


1 Year Return

-0.1%

SGE

6.1%

GB Software

-16.2%

GB Market

Return vs Industry: SGE underperformed the UK Software industry which returned 7.1% over the past year.

Return vs Market: SGE exceeded the UK Market which returned -14.8% over the past year.


Shareholder returns

SGEIndustryMarket
7 Day-2.6%-1.7%-1.9%
30 Day-3.2%-1.5%0.7%
90 Day-8.0%0.7%-4.8%
1 Year2.2%-0.1%7.5%6.1%-13.0%-16.2%
3 Year1.1%-5.8%-25.1%-34.5%-9.4%-20.6%
5 Year43.1%27.4%29.0%6.5%13.5%-12.0%

Price Volatility Vs. Market

How volatile is Sage Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Sage Group undervalued compared to its fair value and its price relative to the market?

36.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SGE (£6.94) is trading below our estimate of fair value (£10.92)

Significantly Below Fair Value: SGE is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: SGE is good value based on its PE Ratio (22.5x) compared to the GB Software industry average (33.5x).

PE vs Market: SGE is poor value based on its PE Ratio (22.5x) compared to the UK market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: SGE's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: SGE is overvalued based on its PB Ratio (4.7x) compared to the GB Software industry average (3.7x).


Next Steps

Future Growth

How is Sage Group forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?

-3.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SGE's earnings are forecast to decline over the next 3 years (-3.8% per year).

Earnings vs Market: SGE's earnings are forecast to decline over the next 3 years (-3.8% per year).

High Growth Earnings: SGE's earnings are forecast to decline over the next 3 years.

Revenue vs Market: SGE's revenue (3.6% per year) is forecast to grow slower than the UK market (6% per year).

High Growth Revenue: SGE's revenue (3.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SGE's Return on Equity is forecast to be low in 3 years time (17.3%).


Next Steps

Past Performance

How has Sage Group performed over the past 5 years?

12.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SGE has high quality earnings.

Growing Profit Margin: SGE's current net profit margins (17.2%) are higher than last year (16.5%).


Past Earnings Growth Analysis

Earnings Trend: SGE's earnings have grown by 12.6% per year over the past 5 years.

Accelerating Growth: SGE's earnings growth over the past year (7.1%) is below its 5-year average (12.6% per year).

Earnings vs Industry: SGE earnings growth over the past year (7.1%) underperformed the Software industry 7.7%.


Return on Equity

High ROE: SGE's Return on Equity (20.7%) is considered high.


Next Steps

Financial Health

How is Sage Group's financial position?


Financial Position Analysis

Short Term Liabilities: SGE's short term assets (£1.3B) exceed its short term liabilities (£1.1B).

Long Term Liabilities: SGE's short term assets (£1.3B) exceed its long term liabilities (£1.1B).


Debt to Equity History and Analysis

Debt Level: SGE's debt to equity ratio (62.7%) is considered high.

Reducing Debt: SGE's debt to equity ratio has reduced from 77.4% to 62.7% over the past 5 years.

Debt Coverage: SGE's debt is well covered by operating cash flow (42.6%).

Interest Coverage: SGE's interest payments on its debt are well covered by EBIT (21x coverage).


Balance Sheet


Next Steps

Dividend

What is Sage Group current dividend yield, its reliability and sustainability?

2.44%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: SGE's dividend (2.44%) is higher than the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: SGE's dividend (2.44%) is low compared to the top 25% of dividend payers in the UK market (5.32%).


Stability and Growth of Payments

Stable Dividend: SGE's dividends per share have been stable in the past 10 years.

Growing Dividend: SGE's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (55.2%), SGE's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SGE's dividends in 3 years are forecast to be covered by earnings (62% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.8yrs

Average management tenure


CEO

Steve Hare (59 yo)

1.92yrs

Tenure

UK£2,515,000

Compensation

Mr. Stephen Hare, also known as Steve, BA, ACA, is Chief Executive Officer of The Sage Group plc since November 2, 2018. He has been Executive Director of The Sage Group plc since January 3, 2014 and serve ...


CEO Compensation Analysis

Compensation vs Market: Steve's total compensation ($USD3.31M) is below average for companies of similar size in the UK market ($USD4.87M).

Compensation vs Earnings: Steve's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Stephen Hare
CEO & Executive Director1.92yrsUK£2.52m0.033%
£ 2.5m
Jonathan Anton Howell
CFO & Director7.42yrsUK£1.66m0.012%
£ 899.7k
Catherine Keers
Chief Marketing Officer0.75yrUK£60.00kno data
Lee Perkins
Chief Operating Officer0.17yrno data0.0031%
£ 232.7k
Aaron Harris
Chief Technology Officer1.5yrsno data0.020%
£ 1.5m
James Sandford
Head of Investor Relationsno datano datano data
Victoria Bradin
General Counsel & Company Secretary4yrsno data0.0016%
£ 118.2k
Amy Lawson
Executive Vice President of Communicationsno datano datano data
Derk Bleeker
Chief Corporate Development Officerno datano data0.0051%
£ 386.5k
Amanda Cusdin
Chief People Officer3yrsno data0.0036%
£ 275.9k
Klaus-Michael Vogelberg
Chief Architect & Technology Advisor1.5yrsno data0.036%
£ 2.7m
Nancy Harris
Managing Director of North America3.33yrsno datano data

1.8yrs

Average Tenure

55yo

Average Age

Experienced Management: SGE's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Stephen Hare
CEO & Executive Director1.92yrsUK£2.52m0.033%
£ 2.5m
Jonathan Anton Howell
CFO & Director7.42yrsUK£1.66m0.012%
£ 899.7k
Christine Fischette
Executive Director3.25yrsno datano data
Donald Brydon
Independent Chairman8.08yrsUK£434.00k0.0092%
£ 693.5k
John Bates
Independent Non-Executive Director1.42yrsUK£20.00kno data
John William Hall
Senior Independent Directorno dataUK£82.00k0.00092%
£ 69.7k
Annette Court
Independent Non-Executive Director1.5yrsUK£39.00k0.00012%
£ 9.1k
Jonathan Bewes
Independent Non-Executive Director1.5yrsUK£39.00k0.00092%
£ 69.7k
Sangeeta Anand
Independent Non-Executive Director0.42yrno datano data
Irana Wasti
Independent Non-Executive Director0.42yrno datano data

1.5yrs

Average Tenure

59yo

Average Age

Experienced Board: SGE's board of directors are not considered experienced ( 1.5 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: SGE insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

The Sage Group plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The Sage Group plc
  • Ticker: SGE
  • Exchange: LSE
  • Founded: 1981
  • Industry: Application Software
  • Sector: Software
  • Market Cap: UK£7.579b
  • Shares outstanding: 1.09b
  • Website: https://www.sage.com

Number of Employees


Location

  • The Sage Group plc
  • North Park
  • Newcastle upon Tyne
  • Tyne and Wear
  • NE13 9AA
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SGGE.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1990
SGELSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1990
SGK1DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1990
SGELBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1990
SGPY.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDJan 2005

Biography

The Sage Group plc, together with its subsidiaries, provides technology solutions and services. It offers Sage business cloud accounting solution; Sage business cloud Payroll, an online payroll system; Sag ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/21 20:32
End of Day Share Price2020/10/21 00:00
Earnings2020/03/31
Annual Earnings2019/09/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.