Structural Headwinds, Microsoft Dependence and Integration Risks Undermine SoftwareOne’s Valuation, Justifying Sell Rating

SoftwareOne Holding Ltd., the Technology sector company, was revisited by a Wall Street analyst today. Analyst Adam Wood from Morgan Stanley downgraded the rating on the stock to a Sell and gave it a CHF7.90 price target.

Adam Wood has given his Sell rating due to a combination of factors tied to both structural industry headwinds and company-specific challenges. He believes SoftwareOne’s profitability as a reseller is increasingly at risk because key software vendors are pushing more aggressively into direct sales with large enterprises and simultaneously cutting the commissions and incentives they pay to intermediaries. The company’s heavy dependence on Microsoft, which accounts for roughly 60% of its revenue, amplifies this vulnerability, especially as Microsoft tightens discount policies and reduces incentives on enterprise agreements. In Wood’s view, this dynamic threatens the long‑term growth potential of SoftwareOne’s value‑added reselling business.

At the same time, Wood highlights that SoftwareOne must execute a complex merger with Crayon while also trying to turn around its struggling North American operations, which elevates operational and integration risk. Following a strong share price rerating, the stock now trades on a mid‑teens FY26 P/E multiple, which he views as demanding relative to an expected mid‑single‑digit organic revenue growth profile. In his assessment, other value‑added resellers such as Computacenter and Softcat offer more attractive risk‑reward, as they appear less exposed to vendor incentive pressures and better positioned in faster‑growing segments of the market. Taken together, these factors lead him to see limited upside and a less compelling investment case for SoftwareOne, underpinning his Sell recommendation.