- Ongoing SaaS transition looks enticing in the long term
- But investors should brace for bumps along the road
- Leading market position in the UK
- Ongoing transition to a more attractive subscription model
- Highly cash-generative and strong balance sheet
- Tough competition, especially from industry giant Intuit (US:INT)
- Transition is risky and weighing on profitability
For UK tech investors, Sage (SGE) has been a reliable bet for decades. The accounting software company, which was founded in 1981 and listed in London eight years later, has been a stalwart of the UK’s diminutive listed tech sector. But compared with the new generation of tech businesses flocking to the market, it is starting to look rather sluggish. Views on the stock are starting to diverge, most strikingly among two of the UK’s most revered investors.