Cannacord Genuity stays at 'buy' on Sage, highlights defensive qualities

Client churn wasn't a big concern either they said, given the small price tag of its products in comparison to the spending budgets of its customers and its historically high rate of client retention.

Bankruptcies among clients on the other hand "cannot be discounted" in this climate, they added.

Indeed, it was the main risk that Sage was facing.

Nevertheless, said analysts Steve Robertson and Kai Korschelt: "Whilst a degree of client bankruptcy in this climate can not be discounted, we believe this would be a slow impact and may be mitigated by government initiatives (including a just announced £330bn loan guarantee package and £5m individual business interruption loans for SMEs)."

Furthermore, the company's wares were not "discretionary", they argued.

"We make no changes to estimates for now, until a better assessment of the current situation can be gleaned."

Their 'stress test' pointed to a roughly 30% decline in the group's non-subscription sales, while revenues from SSRS (SQL Server Reporting Services) would come down by 13%, 8% and 5% over 2020-22, respectively.

The analysts did however pare their target price for the shares, which was heavily influenced by the average valuation for its peers, from 820.0p to 710.0p

"We also believe that given its more defensive qualities, a higher relative valuation could be warranted."