The Sage Share Discussion Threads

[nhb001] 14/12/2021 15:43

I think you may have jinxed it Maddox. :-))

[maddox] 14/12/2021 10:55

Sage is bucking the trend and looking remarkably strong in a very weak market. It suggests that we're seeing institutions buying into their transformation - literally.

[maddox] 19/11/2021 10:48

Thought I’d have a look at the Brokers Analysts recommendations which are fairly evenly balanced on Sage:

Strong Buy........5...(2)
Buy...............1...(0)
Neutral...........8...(8)
Sell..............3...(2)
Strong Sell.......4...(7) Brackets are the scores as at Jan 2020.
.................21..(19)
Source: Share.com

Their views have improved on a year ago but still somewhat cautious: share price targets are all under the current share price, with the sole exception of Jefferies on 900p. So, I think Sage IR have a bit more work to do to get their transformation story across.

Regards, Maddox

[p1nkfish] 17/11/2021 23:02

About time and shows the analyst predictions of a few months back were all way off mark. Nice one.

[contrarian joe] 17/11/2021 21:15

Market seems to have taken to the results,maybe the organic revenue growth they predict for 2022 have woken institutions up.It remains to be seen whether they can deliver on that, trading on a forward p/e of 32 "feel there's not much room for error",so took some good profits today,hope it continues to do well for investors on here.

[nhb001] 17/11/2021 16:06

It feels like a big corner was turned today. The acceleration of digitisation of SMEs has been confirmed again. SGE is well placed to benefit.

[wad collector] 17/11/2021 13:17

More relevant than comparisons with last yrs results are with the previous year. And looks like the pandemic never happened in terms of share price now.

[maddox] 17/11/2021 11:05

Mr Market seems to have liked today's results, with the shares up 35p (4.8%) to 765p as I post.

The top-line figs always look a bit mixed on a first look - as the business transitions into a cloud-based SaaS business. The decline in old-style licencing revenue and activities masks some highly positive growth particularly in H2. This momentum is anticipated to continue into the current year, so the outlook is positive.

A few highlights:

Annual Recurring Revenue +8%
Cloud Native Products +44%
Renewals by Value 99% (H2 c.101%) this is without any price increases.
Cash conversion 126% - driven by the move to subscriptions.

The star in Sage's product portfolio is Intacct aimed at medium-sided firms. In North America (USA and Canada) it's driving recurring revenue growth of 22% primarily through new customer acquisition. This is excellent performance in what is seen as Sage's competitively toughest market. Intacct is only just being rolled-out into other markets - if it can replicate the NA performance geographically it should have a big impact. Currently, 50% of Sage's revenue comes from the medium-sized business sector. So, something to keep an eye on.

With Sage Business Cloud penetration up to 67% from 60% last fin year the transition still has some way to go. However, the bright and shiny Cloud-based SaaS business is becoming more apparent and a very attractive business it's shaping up to be.

Regards Maddox

[nhb001] 05/11/2021 14:17

The real price action in SGE seemed to start immediately after the MPC decided to hold rates at midday yesterday. This may have caused financial institutions to recalibrate their DCF valuation formulas and that advantaged SGE perhaps? I am looking for confirmation of continuing strength in small & medium sized companies for digitisation and movement to cloud. The SGE management seem ultra cautious so some optimism would count for a lot.

[maddox] 05/11/2021 10:18

We're in the Closed Period in the run-up to 17 Nov results. However, Mr Market seems to be optimistic - looking at the last few days share price movements. With the buy-back programme providing a great opportunity for substantial weak holders, such as Terry Smith, to exit we should have stronger support should the results be good.

[spacecake] 30/9/2021 16:49

Global job cuts, message to staff below.

[amt] 28/9/2021 12:51

Good, nothing to worry about then.

[p1nkfish] 28/9/2021 09:26

Well they get to buy more back cheaper.

[danb45] 28/9/2021 08:47

No - other then it was Goldman Sachs - saw this on the LSE boards...

[nhb001] 28/9/2021 08:29

Thanks Dan. Do you have any details you could share?

[danb45] 28/9/2021 08:21

A broker downgrade to sell - target price 700p apparently...

[nhb001] 28/9/2021 08:13

Any ideas as to why the sudden lurch downwards this morning?

[brummy_git] 30/7/2021 14:18

Sage was discussed briefly here on today's Vox 'Stock Picking' videocast (starts 31:10).

www.linkedin.com/posts/paul-hill-a5994116_stocks-to-follow-with-justin-waite-and-paul-activity-6826865195483242496-ww3t

[maddox] 29/7/2021 16:39

Hi Spacecake,

Yep it looks fairly anemic growth at +2.6% for the 9 months if you look at the total revenue, but a more interesting picture emerges if you look further.

They are nudging up their guidance to +5% for the full year. Also, the Q3 Annualised Recurring Revenue (ARR) growth was 6.1%. So, the ARR growth rate is accelerating whilst drag from legacy non-cloud discontinuing business is rapidly diminishing. That revenue line dropped 18% and now represents under 9% of total revenue (less than 7% in Q3).

The FY22 Analysts' Consensus growth estimate is between 7% - 8% and Sage seem on course to hit that. There were a number of encouraging points made in response to the Analysts' questions today.

A recording of the Q3 Analyst Briefing is here:



Regards Maddox

[spacecake] 29/7/2021 09:19

"Total Group revenue increased by 2.6% to GBP1,329m in the first nine months of the year, and by 5.0% to GBP440m (Q3 20: GBP419m) in the third quarter."

It's a headline number near the bottom of the RNS, you know like their embarrassed by it :-)

[maddox] 29/7/2021 08:31

Hi Spacecake - I don't see your figure of 2.6% growth anywhere?

[spacecake] 29/7/2021 07:44

9 month revenue growth 2.6%
Maybe it's just me, but the guided revenue growth seems a bit low, 5%+ for 12 months.
Intuit are guiding 22% for the year 2021, (2020 13%, 2019 13%)

I see why Terry Smith sold Sage and retained Intuit.

[nhb001] 29/7/2021 06:51

I can't see any negatives in there. It all depends if it is already in the price. I will attend the results conference at 8.30 am.