Arcontech (ARC) AI Stock Analysis

• Market Cap: £11.03M
• Dividend Yield: 4.73%
• Average Volume (3M): 26.00K
• Price to Earnings (P/E): 13.5
• Beta (1Y): -0.06
• Revenue Growth: 6.76%
• EPS Growth: -11.53%
• Country: UK
• Employees: 17
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.03
• Shares Outstanding: 13,372,811
• 10 Day Avg. Volume: 14,417
• 30 Day Avg. Volume: 25,997
• PEG Ratio: -1.08
• Price to Book (P/B): 1.35
• Price to Sales (P/S): 3.81
• P/FCF Ratio: 19.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 0.07
• Revenue Forecast (FY): £3.20M

• Rating: 70 Outperform
• Price Target: 95.00p ▲(12.43% Upside)
• Action: Upgraded Date: 12/07/25
• Date: Action: Upgraded 12/07/25

Arcontech's overall stock score is driven by its strong financial performance and attractive valuation, supported by positive corporate events. However, bearish technical indicators and cash flow challenges present risks. The company's strategic focus on core markets and dividend increase are positive signs for future growth.

Positive Factors

Low leverage

A very low debt-to-equity ratio gives Arcontech durable financial flexibility: limited interest burden and higher resilience to revenue cyclicality. Over the next 2-6 months this supports stable dividend policy, capacity for selective investment, and reduced refinancing risk versus leveraged peers.

Very high gross margins

Near-100% gross margins reflect a software-centric model with negligible direct costs, enabling strong operating leverage as sales scale. This structural advantage supports long-term profitability and funds R&D or client service expansion without proportionate COGS growth, beneficial for sustainable margin recovery.

Stable revenue and dividend increase

Modest turnover growth paired with a raised final dividend signals management confidence and steady recurring revenue streams. The combination is a structural positive: it evidences customer retention/new wins and a shareholder-aligned capital allocation policy that can support investor trust over multiple quarters.

Negative Factors

Sharp free cash flow decline

A >65% fall in free cash flow materially reduces internal funding for product development, client implementations, and dividends. Even if net income converts well in some periods, this magnitude of FCF volatility suggests working-capital or timing issues that can constrain strategic spending and weaken liquidity resilience.

Eroding net margins

A multi-point decline in net margin, alongside falling EBIT/EBITDA margins, indicates rising operating costs or pricing pressure. Persisting margin erosion would reduce cash generation and ROE, limiting the firm's ability to invest in products or sales capacity and making long-term profitability more sensitive to revenue swings.

Negative EPS growth

Substantial negative EPS growth signals earnings volatility that could reflect margin pressure, one-offs, or slower operating leverage. Coupled with only modest revenue growth, declining EPS undermines reinvestment capacity and may constrain hiring or product development that are needed to sustain competitive positioning over the medium term.

Arcontech Business Overview & Revenue Model

Company Description

Arcontech Group Plc, together with its subsidiaries, develops and sells proprietary software in the United Kingdom, rest of Europe, Africa, North America, Australia, and the Asia Pacific. Its products include CityVision, a market data platform for real-time data reception, transformation, and publishing; CityVision Multi Vendor Contribution System, which enables the user to contribute data automatically and simultaneously to various destinations; and CityVision Cache, a real-time data repository. The company also offers Excelerator, a vendor independent system that enables real time reception and publishing of market data, as well as provides flexibility and control to manipulate data from various sources through Excel's mathematical and display features. In addition, it provides CityVision Relay, a real-time data distribution engine; CityVision Symbol Mapper, a real-time data conversion system that allows market data managers to separate data integration from the data source; and CityVision API that develops real-time market data applications, as well as offers computer consultancy services. The company was formerly known as Knowledge Technology Solutions PLC and changed its name to Arcontech Group plc in February 2009. Arcontech Group plc was founded in 1979 and is based in London, the United Kingdom.

How the Company Makes Money

Arcontech generates revenue through a combination of software licensing fees, subscription services, and support contracts. The company primarily earns money by selling licenses for its software products to financial institutions, trading firms, and other stakeholders in the financial markets. Additionally, recurring subscription fees from clients using its cloud-based services contribute significantly to its revenue. Arcontech also engages in partnerships with key players in the financial technology space, which can enhance its market reach and provide additional revenue opportunities through integrated solutions. The company may also benefit from consulting and technical support services, which add to its overall earnings.

Arcontech Financial Statement Overview

Summary

Arcontech demonstrates strong profitability and a stable balance sheet with low leverage. However, declining net profit margins and cash flow challenges could pose risks. The company should focus on improving operational efficiency and cash flow management to sustain growth.

Income Statement

Arcontech shows a strong gross profit margin consistently at 100%, indicating effective cost management. However, the net profit margin has decreased from 36.69% in 2024 to 30.36% in 2025, suggesting a decline in profitability. Revenue growth is modest at 4.52% in 2025, following a slight increase in 2024. EBIT and EBITDA margins have also decreased, reflecting potential challenges in operational efficiency.

Balance Sheet

The company maintains a low debt-to-equity ratio of 0.049, indicating minimal leverage and financial stability. Return on equity has decreased slightly to 10.80% in 2025, which is still a healthy level, but shows a downward trend. The equity ratio remains strong, suggesting a solid capital structure.

Cash Flow

Free cash flow has significantly decreased by 65.84% in 2025, indicating potential liquidity issues. The operating cash flow to net income ratio has also declined, suggesting reduced cash generation efficiency. However, the free cash flow to net income ratio remains high at 98.50%, indicating that most of the net income is being converted into free cash flow.

Breakdown	TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	3.04M	3.11M	2.91M	2.73M	2.76M	2.99M
Gross Profit	2.98M	3.11M	2.91M	2.58M	2.76M	2.99M
EBITDA	852.05K	785.10K	1.25M	1.14M	925.78K	1.21M
Net Income	819.89K	943.43K	1.07M	980.11K	610.57K	1.05M
Balance Sheet
Total Assets	10.77M	10.82M	10.56M	9.03M	8.78M	8.57M
Cash, Cash Equivalents and Short-Term Investments	7.77M	7.40M	7.16M	6.41M	6.03M	5.40M
Total Debt	368.75K	427.36K	537.67K	40.32K	195.85K	344.30K
Total Liabilities	2.17M	2.09M	2.30M	1.42M	1.80M	1.99M
Stockholders Equity	8.60M	8.73M	8.27M	7.61M	6.97M	6.58M
Cash Flow
Free Cash Flow	1.14M	597.31K	1.02M	974.92K	1.12M	813.13K
Operating Cash Flow	1.15M	606.41K	1.04M	978.40K	1.12M	814.62K
Investing Cash Flow	-4.19K	240.71K	236.26K	73.50K	11.22K	11.78K
Financing Cash Flow	-649.80K	-611.79K	-522.92K	-590.14K	-487.18K	-424.64K

Arcontech Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 84.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:ARC, the sentiment is Negative. The current price of 84.5 is above the 20-day moving average (MA) of 81.92, above the 50-day MA of 83.45, and below the 200-day MA of 87.79, indicating a neutral trend. The MACD of 0.38 indicates Negative momentum. The RSI at 47.41 is Neutral, neither overbought nor oversold. The STOCH value of 52.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:ARC.

Arcontech Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ING	77 Outperform	£15.67M	8.45	28.74%	5.18%	―	―
ARC	70 Outperform	£11.03M	13.46	11.10%	4.73%	6.76%	-11.53%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
ZOO	50 Neutral	£14.01M	-2.68	-32.23%	―	-7.72%	54.13%
BIRD	48 Neutral	£11.05M	-3.78	-32.98%	―	-9.19%	4.69%
PEN	47 Neutral	£10.46M	-2.16	-52.41%	―	-31.21%	-292.31%
ESYS	47 Neutral	£10.53M	-1.89	―	―	-5.21%	76.14%

Arcontech Corporate Events

Arcontech CFO Increases Stake with Purchase of Ordinary Shares

Arcontech Group plc has reported an on-market share purchase by its Chief Financial Officer, Ben Hodges, who acquired 6,472 ordinary shares at 77.25 pence each on 6 February 2026. Following the transaction, Hodges’ beneficial holding in the company has risen to 19,495 shares, representing about 0.15% of Arcontech’s issued share capital, a move that marginally increases board-level equity alignment with shareholders and may be read by investors as a signal of confidence in the company’s prospects.

The most recent analyst rating on (GB:ARC) stock is a Hold with a £87.00 price target. To see the full list of analyst forecasts on Arcontech stock, see the GB:ARC Stock Forecast page.

Arcontech CEO Increases Stake with Purchase of Additional Shares

Arcontech has disclosed that its Chief Executive Officer, Matthew Jeffs, has purchased 20,000 ordinary shares in the company at 76.46 pence per share. Following this transaction, Jeffs’ beneficial holding rises to 1,033,000 shares, representing 7.72% of Arcontech’s issued share capital, a move likely to be interpreted by investors as a vote of confidence in the firm’s prospects and alignment of management interests with shareholders.

The most recent analyst rating on (GB:ARC) stock is a Hold with a £89.00 price target. To see the full list of analyst forecasts on Arcontech stock, see the GB:ARC Stock Forecast page.

Arcontech Profits Fall on Lower Revenues but Strong Cash Pile Underpins Growth Plans

Arcontech reported a softer first half for the six months to 31 December 2025, with revenue down 4.7% to £1.44m as the loss of a long-standing client, some customer downsizing and a sharp 69% drop in one-off revenues outweighed its largely sticky, multi-year contract base; recurring revenues now account for 99% of total sales. Profit before tax fell 23.8% to £0.39m and adjusted EBITDA declined 23.6%, reflecting lower revenue and continued investment in staff, but the balance sheet remains strong with net cash up 8.4% to £7.8m, no interim dividend is proposed, and the board is using its cash position to fund product development and explore new business areas, while signalling confidence that a strong pipeline, new client wins and growth at existing customers will help restore recurring revenue momentum and return the group to growth in the next financial year.

The most recent analyst rating on (GB:ARC) stock is a Hold with a £89.00 price target. To see the full list of analyst forecasts on Arcontech stock, see the GB:ARC Stock Forecast page.

Arcontech Ties New Management Share Options to £4m Revenue Target

Arcontech Group has granted 262,500 share options under its EMI and non-EMI schemes to various employees, including senior management such as the chief executive, chief financial officer, head of development and head of customer support, at an exercise price of 84.50p per share, exercisable from 30 June 2028. The options, which are subject to the company achieving £4 million in annual revenue by the end of the 2027/28 financial year and must be held for two years after exercise, lift the total outstanding options to 803,000, equivalent to about 6% of Arcontech’s issued share capital, further aligning key staff incentives with the company’s medium-term growth and revenue targets.

The most recent analyst rating on (GB:ARC) stock is a Buy with a £95.00 price target. To see the full list of analyst forecasts on Arcontech stock, see the GB:ARC Stock Forecast page.