U.S. stock futures rise after U.S.-Japan trade deal; Tesla, Alphabet earnings due
Investing.com -- Shares of Sage Group (LON:SGE) traded lower on Thursday following a slightly softer-than-expected start to the financial year.
The British enterprise software firm reported organic total revenue growth of 9.1% for the first quarter, falling slightly below consensus expectations for the full-year growth of 9.2%.
Recurring revenue, which accounts for a significant portion of Sage’s earnings, grew at a rate of 9.6%, primarily driven by subscription revenues, which rose 12%.
However, this increase trailed the full-year consensus organic recurring growth estimate of 9.9%.
Meanwhile, other revenue declined by 6%, marking a sharper fall compared to the 1% decline observed in the previous quarter.
From a regional perspective, North America demonstrated the strongest performance, with total revenue expanding by 11% organically.
The UK and Ireland region posted a 9% growth rate, while Europe lagged slightly, rising by 7%.
Despite the lower-than-expected revenue growth, Sage reaffirmed its full-year guidance, maintaining an outlook for total organic revenue growth at or above 9%.
The company also projected an upward trend in margins for the fiscal year and beyond, aligning with consensus expectations of a 60-basis-point expansion to 23.3%.
Barclays (LON:BARC) analysts have maintained an ’underweight’ rating on Sage Group’s stock, citing concerns over near-term growth sustainability.
The brokerage set a price target of GBP 10.80 per share, representing a potential downside of approximately 19.2% from the stock’s last closing price of GBP 13.37.
The cautious stance reflects broader concerns about the company’s ability to maintain momentum amid a seasonally weaker quarter for new customer acquisitions.