- The Sage Group
- 22 November 2024 14:38:55
Source: Sharecast
Canaccord Genuity noted that Sage had delivered in line revenues, a modest operating beat, a new buyback and 'in line' FY25 guidance.
"Yet the shares popped ~18%. Admittedly there was a significant EPS beat and forward estimate upgrades due to lower tax - but we consider this a relatively low-quality source of upside," said the analysts.
Canaccord stated that if last year's trajectory was anything to go by, Sage's buyback could support the share price until late spring.
"So actively shorting the stock here may not be the best idea. However, a slowdown in recurring revenue growth to high-single-digit % is a tangible risk," it said, pointing out that this seems at odds with the shares' full valuation.
The Canadian bank reiterated its 'sell' rating on the stock.
Reporting by Iain Gilbert at Sharecast.com