Sage Group : A good compounder with additional re-rating potential
Sage has established itself as Europe's leading provider of ERP software for SMEs, with an offering now focused on the cloud. After several years of transformation, the group now has a structured SaaS model, a unified product portfolio and a solid financial profile. This, coupled with solid growth in cloud ERP for SMEs and the rise of new technologies such as AI, offers good visibility on the outlook for revenue growth (2025-2028e CAGR of 8.5%) and EBIT (2025-2028e CAGR of c.12%). Moreover, the valuation remains attractive (22x EV/EBIT fwd 12m, 20% discount to peers). We initiate coverage at Outperform with a target price of 1,550p.Sage Group is a technology provider that assists to manage businesses of all sizes. Co. provides a suite of cloud business management solutions and services including accounting, financials, enterprise management, people, payroll, payments and banking, as well as marketplace apps that can be provisioned to match the exact needs of any business. Co. has three reportable segments in which it operates, being Northern Europe (the U.K. and Ireland), Central and Southern Europe (Germany, Switzerland, Poland, France and Portugal) and NorthAmerica (the U.S., Canada and North America Intacct).
Oddo Securities provides securities brokerage and research services. The company offers equity, economic, and derivatives research and credit analysis services. It focuses on insurance, automotive, building materials, pharmaceuticals, telecommunications, information technology, and agri-food industries.
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