Down 37%, is there a once-in-a-decade probability for me to purchase this FTSE 100 inventory? – Imperial Wire

A handful of high-quality FTSE 100 shares have bought off lately because of panic about AI disruption. Chief amongst these is Sage Group (LSE:SGE), the software program agency whose share value has crashed 22% yr up to now.

This steep sell-off leaves the fill up simply 42% over 5 years, method behind the FTSE 100’s acquire of 59%.

Certainly, Sage’s share value is barely above the place it stood in September 2016, virtually 10 years in the past. But once I have a look at the enterprise, versus the share value, I don’t see something basically unsuitable. Fairly the other, in truth.

So, would possibly this be a once-in-a-decade alternative for me to take?

The ability of narratives

For these unfamiliar, Sage offers accounting, HR, and payroll software program for small and medium-sized enterprises (SMEs). Over 2m clients use its merchandise in 26 nations.

Buyers have been flapping lately as a result of they worry AI automation instruments from the likes of Anthropic are going to exchange specialised software program merchandise. The type that Sage has spent 40+ years perfecting whereas constructing numerous trusted relationships with clients.

Whereas acknowledging this threat, I’m very a lot of the opinion that the highly effective AI-will-destroy-software narrative is wildly exaggerated in some instances.

Lengthy-time Sage CEO Steve Hare is kind of clear the place he stands. “On social media you could find folks claiming they’ve an AI agent that may substitute your chief monetary officer and that nobody wants accountants any extra,” he instructed The Mail on Sunday. “That is without doubt one of the most ridiculous issues I’ve ever heard in my profession. It’s fully ludicrous.”

AI theatre

Hare referred to as the idea that the expertise will substitute all types of issues “AI theatre“. Certainly he’s proper when you consider it. Can a mid-cap agency (or any really) afford an AI hallucination of their monetary reviews? Accuracy is non-negotiable.

Within the medium section, accountants and chief monetary officers (CFOs) use Sage. They like confirmed options and are clearly risk-averse. And because the agency factors out, even within the small enterprise section, entrepreneurs “are taking recommendation from their accountants“.

Sage has a large put in base of customers, with deep insights into not simply their basic ledgers but in addition workflows. Its highly effective AI CoPilot is skilled on huge quantities of correct knowledge, and a few clients are already having fun with 5 to 10 hours per week in effectivity financial savings.

So, the place is the inducement to threat leaving Sage’s AI-powered platform? I simply don’t see it.

In Q1 2026, income grew 10% to £674m, with 15% development in Sage Enterprise Cloud. There was spectacular 13% development within the large North American market. Even in Europe, income elevated by 7%, with stable development throughout its accounting, HR, and payroll options.

Sage on sale?

The inventory’s price-to-earnings (P/E) ratio has fallen to only 22, down from a 10-year median of 30. The final time it was this low cost was throughout 2022’s tech inventory bear market.

Trying forward, although, Metropolis analysts anticipate 18% development in earnings per share this yr, then one other 13.7% in FY27 (beginning October). This really places Sage on a dirt-cheap P/E a number of of 15 for FY27.

Placing all this collectively, I feel there’s a once-in-a-decade probability to contemplate right here with this FTSE 100 inventory. It’s a shopping for alternative I’m going to take quickly.