logo-loader
viewThe Sage Group plc

Sage Group shares plummet as Deutsche Bank downgrades software firm to 'sell'

The competitive situation in Sage's core mid-market franchise appears to be worsening, according to Deutsche Bank

Sage
Microsoft is one of Sage's rivals

Shares in software firm The Sage Group (LON:SAGE) plunged on Monday after Deutsche Bank downgraded the stock to a ‘sell’ rating from ‘hold’ and cut its target price to 540p from 630p.

Deutsche Bank said after speaking to a number of accountants and resellers across the UK, US and Australia, along with senior figures from key competitors Xero and Intuit, its key takeaway from these conversations is that the competitive situation in Sage's core mid-market franchise “appears to be worsening”.

READ: Sage Group's organic revenue growth picks-up

“Entry level players at far lower price points are moving upmarket and are building functionality either internally or through third-party platform partners,” the bank said.

“Higher-end competitors also appear to be gradually gaining share from Sage's core user and reseller base.

“We would highlight Microsoft as the stand out player here, with the Dynamics suite cited by Sage resellers as the most frequently seen competitor and furthermore, the Dynamics 365 SaaS suite grew at 56% at constant  currencies in the fourth quarter.”

Microsoft’s Dynamics 365 is a product line of enterprise resource planning and customer relationship management software applications.

In morning trading, shares in Sage fell 6.4% to 623p.

Quick facts: The Sage Group plc

Price: 691 GBX

LSE:SGE
Market: LSE
Market Cap: £7.54 billion
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

Amundi Physical Gold ETC: Europe's cheapest ETC now trading on the London...

Amundi Physical Gold ETC's Ashley Fagan who's head of ETF, Indexing & Smart Beta Development for UK and Ireland introduces the product to Proactive London's Andrew Scott. She says they've seen a great deal of demand from European as well as UK investors and that's what lead them to list...

7 hours, 28 minutes ago

2 min read