Sage Group share price analysis after Bill Holdings stock plummets

Sage Group (LON: SGE) share price crashed by over 3% as investors reacted to the latest results by Bill Holdings. The stock, which has been one of the best performers in the FTSE 100 index, retreated to 975p on Friday, down from the year-to-date high of 1,055p.

Bill Holdings earnings

The fintech industry has come under intense pressure in the past few months. In October, stocks like Worldline and CAB Payments plunged by double-digits after publishing weak financial results. 

This week, however, fintech companies have published mixed results. Investors cheered results from PayPal and Block, the parent company of Square and AfterPay. They also soared on Bill Holdings, the parent of Bill.com. 

Bill.com stock price has plunged by more than 30% on Friday after the company sent a mixed picture about its outlook. In a statement, the company said that its revenue rose by 15.32% YoY in the third quarter to $265.14 million. Its net income was $64 million while its subscription business struggled. 

Bill Holdings also downgraded its financial outlook, citing the tighter monetary conditions in the business payment industry. In a statement, the Chief Financial Officer (CFO) said:

“Over the last several quarters, the external economic environment has created challenges for SMBs, and this has resulted in declining B2B spending trends. Beginning in late fiscal Q1 and continuing into Q2, we have seen further tightening by our customers and suppliers.”

The dim outlook by Bill Holdings is the main reason why Sage Group share price retreated on Friday. Analysts believe that the company will also be under pressure as companies in Europe and the US go through financial weakness.

The most recent results showed that Sage Group’s revenue was doing well. Its total revenue rose by 10% to £1.63 billion. 

Sage Group share price outlook

The daily chart shows that the Sage Group stock price has pulled back in the past few months. It has recently retested the important 23.6% Fibonacci Retracement level. Most importantly, it is consolidating at the 50-day and 25-day Exponential Moving Averages.

The stock has formed a bullish flag pattern, which is a popular continuation sign. Also, the MACD has moved below the neutral point. Therefore, the shares will likely bounce back ahead of the upcoming earnings. If this happens, the shares will likely retest the YTD high of 1,056p.

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