Sage stock forecast
Sage's weighted forecast is 1067.21 GBp in October 2029 (+1% including dividends). It hinges on durable Intacct growth, successful migrations, cash conversion and manageable debt.
Where could Sage's shares be by 2029?
The weighted forecast is 1049.57 GBp in October 2027 (-5% including dividends) and 1067.21 GBp in October 2029 (+1% including dividends). It assigns 25% probability to the bear case, 60% to base and 15% to bull. The decisive evidence will be regional Intacct customer growth, implementation quality, retention and profitable adoption. FY26 results on 19 November 2026 will test delivery against guidance and set the next FY27 outlook. Operating cash must also rebuild room for investment and shareholder returns before the February 2028 bond maturity.
| Case | Probability | October 2027 | October 2028 | October 2029 |
|---|---|---|---|---|
| Bear | 25 % | 632.92 (-42 %) | 578.33 (-45 %) | 566.09 (-44 %) |
| Base | 60 % | 1116.49 (+1 %) | 1113.64 (+3 %) | 1090.33 (+3 %) |
| Bull | 15 % | 1476.29 (+33 %) | 1634.94 (+49 %) | 1809.92 (+67 %) |
| Weighted | 100 % | 1049.57 (-5 %) | 1058.01 (-2 %) | 1067.21 (+1 %) |
What has to go right or wrong for Sage's forecast?
Free cash flow after stock pay rises from £468m in the first forecast year to £505m in the second. It ends at £540m. The bear row falls to £392m before recovering to £433m, while the bull row reaches £495m initially and ends at £620m. The base path reflects 10% organic growth, 25% cloud-native growth and H1 cash conversion of 116%, but keeps cash growth below revenue guidance because tax, interest, working capital and stock pay remain uncertain.
| October 2027 | October 2028 | October 2029 | |
|---|---|---|---|
| Free cash flow after stock pay | 468 (392 / 495) | 505 (412 / 554) | 540 (433 / 620) |
| Shares (millions) | 902 (915 / 888) | 898 (924 / 874) | 896 (933 / 860) |
| Dividends per share | 0.24 (0.23 / 0.24) | 0.26 (0.23 / 0.26) | 0.28 (0.23 / 0.29) |
| Enterprise value to free cash flow after stock pay | 25.00 (19.00 / 30.00) | 23.00 (17.00 / 29.00) | 21.00 (16.00 / 28.00) |
| Net debt | 1,635 (1,659 / 1,733) | 1,609 (1,662 / 1,785) | 1,566 (1,649 / 1,789) |
How much cash does Sage really make?
The cash bridge gives a more demanding view. In FY2025, cash from operations was £528m. Capital spending was £41m, and lease payments were £17m. That leaves £470m of free cash flow before the analytical deduction for £51m of share-based pay. Including £18m of intangible purchases gives £452m before stock pay and £401m after it.
Sage’s own free-cash-flow measure was £517m, £47m above that supplied calculation, because it uses different classifications and adjustments. Cash interest of £46m was already deducted in operating cash flow. The specialist conclusion is therefore positive but measured: cash generation is strong, while maintenance spending and the true cost of employee compensation still matter.
| Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | |
|---|---|---|---|---|---|
| Cash from operations | 528 | 491 | 387 | 285 | 376 |
| − Capital spending | 41 | 19 | 5 | 12 | 39 |
| − Lease payments | 17 | 16 | 18 | 19 | 22 |
| = Free cash flow | 470 | 456 | 364 | 254 | 315 |
| − Stock pay | 51 | 56 | 49 | 36 | 36 |
| = Real free cash flow | 419 | 400 | 315 | 218 | 279 |
What this means. The company's own free cash flow is higher because its rules leave out some cash costs and unusual cash movements that our count includes.
What does an investor pay for Sage today?
The price-to-earnings ratio, or P/E, says how much investors pay for each pound of annual profit. Sage’s trailing P/E is higher than its forward P/E, but the forward figure uses estimates. The reason to accept a substantial multiple is recurring income: 97% of FY25 revenue was recurring. Customers repeatedly need accounting and payroll systems, although they can still cancel, resist price increases or move to competitors.