Sage, which makes accounting software for businesses, has seen its share price climb by almost a fifth this year after topping expectations with its first-quarter growth.
But Barclays’ number crunchers have warned that the first half benefits from easier comparatives, while things are expected to get a little tougher in the second half of the year.
“We think Q1 should not be viewed as an especially material data point in assessing the growth rate of the business over the coming couple of years,” read a note to clients.
“It is likely that the [cloud] transition will gather speed over the course of the year – a good thing – but that this will result in revenue growth moderating. This could be further exacerbated by tougher comps in the second half of the year.”
The analysts added: “We think an H2 slowdown is likely and that this could disappoint the market.
“We therefore remain ‘underweight’, albeit on an increased price target of 550p (from 495p), now based on 17x CY20E EPS (from 15x) to reflect increased market multiples.”
Sage shares were 0.1% higher at 702.8p on Friday morning – comfortably ahead of Barclays’ target.