The Sage Group plc (LON:SGE) Annual Results Just Came Out: Here's What Analysts Are Forecasting For This Year

The Sage Group plc (LON:SGE) shareholders are probably feeling a little disappointed, since its shares fell 2.3% to UK£10.65 in the week after its latest full-year results. It looks like the results were a bit of a negative overall. While revenues of UK£2.5b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 2.6% to hit UK£0.37 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Taking into account the latest results, the most recent consensus for Sage Group from 17 analysts is for revenues of UK£2.75b in 2026. If met, it would imply a decent 9.4% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 26% to UK£0.47. Yet prior to the latest earnings, the analysts had been anticipated revenues of UK£2.74b and earnings per share (EPS) of UK£0.44 in 2026. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

Check out our latest analysis for Sage Group

There's been no major changes to the consensus price target of UK£13.36, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Sage Group, with the most bullish analyst valuing it at UK£16.00 and the most bearish at UK£10.50 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Sage Group's growth to accelerate, with the forecast 9.4% annualised growth to the end of 2026 ranking favourably alongside historical growth of 6.9% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 8.2% per year. Sage Group is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Sage Group following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at UK£13.36, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Sage Group going out to 2028, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Sage Group that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.