Nick Fletcher for The Guardian writes: Sage, the accountancy software specialist, has fallen back on competition concerns.
Some investors thought it might receive a boost from positive results from rival NetSuite, which reported a 35% rise in fourth quarter revenue and raised its guidance for 2014.
But NetSuite is trying to make inroads into Sage's market, issuing a Sage Switch guide to encourage users to move to NetSuite's cloud services. Analyst George O'Connor at Panmure Gordon said:
Investors will read-across to Netsuite's beat last night and think - "bless, what's good for the goose is good for the gander". However, the latest Netsuite Sage Attack campaign includes customer case studies. To our knowledge these attack campaigns have yielded diddly in the past and we all know that Sage UK has been humming along - but the cloud is growing in momentum.
Netsuite's tactic only highlights that the UK - the jewel in the Sage crown - is one of the most competitive markets and where Sage has to contend with the likes of Xero, Intuit, and the re-formed IRIS, Tenhill and chewing away at the entry there is FreeAgent. None of that is obvious from the Sage share price which marches ever upward. While we are of course delighted for Sage shareholders the valuation is now punchy. We retain our hold for now.
Sage has slipped 7.9p to 412.6p.
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