Sage (LON:SGE) shares fell sharply this morning by 6.79 per cent at 09:31 GMT down 43.90p to 621.90p, following Deutsche Bank’s decision to list them as a 'sell'. A spokesperson for Deutsche Bank added a pretty foreboding warning to the group as rivals become more competitive, citing conversations with resellers and key competitors as the main reason behind their decision.
Competitors' activity noted
In a statement from the bank, as reported in Proactive investors today, it was reasoned that “Entry players at far lower price points are moving upmarket and are building functionality either internally or through third party platform partners.” They went as far as citing Microsoft as being the stand out competitor with Sage concerned about the growing popularity of Microsoft’s ‘Dynamics Suite’.
'Inconsistent operational execution'
After citing it’s French business as the reason for a slow start to the year in January and with full year sales expected to be down, a spokesperson for the Sage today said that “inconsistent operational execution” was the reason for organic revenue growth being below the expectations of management.
Some investors could see Sage as an attractive proposition, with shares down 30 per cent since January when it was at a high of 825p, but the company will have to convince prospective investors that it can resolve internal operational issues and become more competitive.