As of June 21, 2025, Sage Group PLC's estimated intrinsic value ranges from $436.45 to $713.40 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $713.40 | -43.2% |
| Discounted Cash Flow (5Y) | $657.56 | -47.6% |
| Dividend Discount Model (Multi-Stage) | $559.10 | -55.5% |
| Dividend Discount Model (Stable) | $585.75 | -53.4% |
| Earnings Power Value | $436.45 | -65.3% |
Is Sage Group PLC (SGE.L) undervalued or overvalued?
With the current market price at $1256.00, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Sage Group PLC's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.8 | 0.96 |
| Cost of equity | 8.7% | 11.7% |
| Cost of debt | 4.0% | 4.7% |
| Tax rate | 20.7% | 23.4% |
| Debt/Equity ratio | 0.1 | 0.1 |
| After-tax WACC | 8.2% | 11.0% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $658 | $7,215M | 78.2% |
| 10-Year Growth | $713 | $7,745M | 60.2% |
| 5-Year EBITDA | $703 | $7,642M | 79.4% |
| 10-Year EBITDA | $746 | $8,056M | 61.8% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $481M |
| Discount Rate (WACC) | 11.0% - 8.2% |
| Enterprise Value | $4,388M - $5,847M |
| Net Debt | $976M |
| Equity Value | $3,412M - $4,871M |
| Outstanding Shares | 9M |
| Fair Value | $360 - $513 |
| Selected Fair Value | $436.45 |
| Metric | Value |
|---|---|
| Market Capitalization | $11917M |
| Enterprise Value | $12893M |
| Trailing P/E | 34.34 |
| Forward P/E | 32.98 |
| Trailing EV/EBITDA | 13.70 |
| Current Dividend Yield | 171.20% |
| Dividend Growth Rate (5Y) | 1.70% |
| Debt-to-Equity Ratio | 0.10 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $214.02 |
| Discounted Cash Flow (5Y) | 25% | $164.39 |
| Dividend Discount Model (Multi-Stage) | 20% | $111.82 |
| Dividend Discount Model (Stable) | 15% | $87.86 |
| Earnings Power Value | 10% | $43.64 |
| Weighted Average | 100% | $621.74 |
Based on our comprehensive valuation analysis, Sage Group PLC's weighted average intrinsic value is $621.74, which is approximately 50.5% below the current market price of $1256.00.
Key investment considerations:
Given these factors, we believe Sage Group PLC is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.