Softcat (SCT) AI Stock Analysis

• Market Cap: £2.83B
• Dividend Yield: 2.05%
• Average Volume (3M): 346.08K
• Price to Earnings (P/E): 21.3
• Beta (1Y): 0.52
• Revenue Growth: 51.50%
• EPS Growth: 11.62%
• Country: UK
• Employees: 2,509
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 0.41
• Shares Outstanding: 200,022,810
• 10 Day Avg. Volume: 356,983
• 30 Day Avg. Volume: 346,082
• PEG Ratio: 0.00
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: £1,895.00
• Price Target Upside: 33.45% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 75 Outperform
• Price Target: 1,654.00p ▲(16.48% Upside)

Softcat's strong financial performance and positive corporate events are the most significant factors driving the score. However, technical indicators suggest caution due to bearish trends, and the valuation is moderate. The absence of recent earnings call data limits insights into management's current outlook.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust business expansion and effective market penetration, which can sustain long-term financial performance.

Cash Flow Generation

Effective cash generation enhances liquidity and financial flexibility, supporting ongoing investments and operational stability.

Low Leverage

Low leverage reduces financial risk and interest obligations, allowing more resources for growth initiatives and shareholder returns.

Negative Factors

Volatile Revenue Growth

Volatility in revenue growth can lead to unpredictability in financial performance, impacting strategic planning and investor confidence.

Slowing Free Cash Flow Growth

Slowing free cash flow growth may affect future liquidity and the ability to fund new projects or return capital to shareholders.

Relatively Low Equity Ratio

A relatively low equity ratio could limit financial resilience and flexibility, potentially affecting the company's ability to withstand economic downturns.

Softcat Business Overview & Revenue Model

Company Description

Softcat plc primarily acts as a value-added IT reseller and IT infrastructure solutions provider in the United Kingdom. The company advices, procures, designs, implements, and manages technology, such as software licensing, workplace technology, networking, security, and cloud and datacenter for businesses and public sector organizations. It also offers asset management, collaboration, connectivity, and device services. In addition, the company provides supply chain operations and virtual desktop and applications. Further, it offers lifecycle, modern management, and financial solutions. The company was incorporated in 1987 and is headquartered in Marlow, the United Kingdom.

How the Company Makes Money

Softcat generates revenue through multiple streams, primarily by reselling software and hardware products from leading tech manufacturers, such as Microsoft, Cisco, and Dell. The company earns a significant portion of its income from software licensing agreements, where it acts as an intermediary between software developers and end-users. Additionally, Softcat provides managed services, cloud computing solutions, and IT consultancy, which contribute to its recurring revenue. Strategic partnerships with major vendors enhance its product offerings and expand its market reach, while a focus on customer service and long-term relationships fosters client loyalty and repeat business.

Softcat Financial Statement Overview

Summary

Softcat exhibits strong financial health with robust revenue growth, efficient operations, and solid cash flow generation. The company maintains a low leverage position, enhancing its financial stability. While revenue growth has been volatile in the past, the recent performance indicates a positive trajectory. Continued focus on improving equity ratios and maintaining cash flow growth will be key to sustaining long-term financial strength.

Income Statement

Softcat has demonstrated strong revenue growth with a 40.1% increase in the latest year, indicating robust business expansion. The gross profit margin has improved significantly over the years, reaching 33.6% in 2025. The net profit margin is healthy at 9.1%, reflecting efficient cost management. EBIT and EBITDA margins are also strong, showing operational efficiency. However, the revenue growth rate has been volatile in previous years, which could pose a risk.

Balance Sheet

The company maintains a solid balance sheet with a low debt-to-equity ratio of 0.10, indicating low leverage and financial stability. Return on equity is impressive at 39.3%, showcasing effective use of shareholder funds. The equity ratio stands at 28.4%, suggesting a balanced capital structure. However, the relatively low equity ratio could be improved to enhance financial resilience.

Cash Flow

Softcat's cash flow performance is strong, with a 6.0% growth in free cash flow, indicating effective cash generation. The operating cash flow to net income ratio is 1.11, showing good cash conversion. The free cash flow to net income ratio is 1.02, reflecting efficient cash utilization. Despite these strengths, the growth rate of free cash flow has slowed compared to previous years, which may impact future liquidity.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.46B	1.46B	962.63M	985.30M	1.08B	784.05M
Gross Profit	491.91M	490.73M	417.75M	372.31M	326.65M	276.06M
EBITDA	184.47M	190.74M	166.47M	147.02M	143.61M	124.24M
Net Income	133.01M	133.01M	119.04M	112.03M	110.41M	96.19M
Balance Sheet
Total Assets	1.19B	1.19B	780.75M	647.72M	672.06M	497.36M
Cash, Cash Equivalents and Short-Term Investments	182.28M	182.28M	158.45M	122.62M	97.32M	101.72M
Total Debt	35.19M	35.19M	10.36M	9.76M	6.67M	8.30M
Total Liabilities	853.14M	853.14M	482.71M	396.28M	460.96M	318.21M
Stockholders Equity	338.78M	338.78M	298.04M	251.44M	211.10M	179.14M
Cash Flow
Free Cash Flow	132.60M	136.28M	120.27M	102.79M	78.89M	85.01M
Operating Cash Flow	144.38M	148.06M	115.61M	106.04M	84.11M	91.48M
Investing Cash Flow	-19.68M	-23.37M	-1.35M	-3.25M	-5.22M	-6.46M
Financing Cash Flow	-98.15M	-98.15M	-78.42M	-77.28M	-86.86M	-63.43M

Softcat Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1420.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SCT, the sentiment is Negative. The current price of 1420 is below the 20-day moving average (MA) of 1441.70, below the 50-day MA of 1476.82, and below the 200-day MA of 1578.76, indicating a bearish trend. The MACD of -12.24 indicates Positive momentum. The RSI at 38.93 is Neutral, neither overbought nor oversold. The STOCH value of 16.37 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:SCT.

Softcat Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CCC	78 Outperform	£3.06B	19.20	17.42%	2.43%	21.86%	0.86%
SCT	75 Outperform	£2.83B	21.32	41.77%	2.05%	51.50%	11.62%
FDM	74 Outperform	£145.20M	9.37	24.53%	13.93%	-27.01%	-49.07%
TRD	72 Outperform	£45.32M	23.79	44.27%	2.69%	30.01%	138.65%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
RCN	54 Neutral	£190.75M	77.26	1.35%	3.01%	-31.46%	297.44%

Softcat Corporate Events

Softcat plc Announces Executive Incentive Awards Under LTIP

Softcat plc announced the granting of nil-cost options under its Long Term Incentive Plan (LTIP) to key executives, including CEO Graham Charlton and CFO Katy Mecklenburgh. These awards are contingent on performance metrics like Total Shareholder Return and Earnings per Share over a three-year period, with the potential to significantly increase executive compensation based on company performance. The move underscores Softcat’s commitment to aligning executive incentives with shareholder interests and maintaining competitive leadership compensation packages.

Softcat Grants Nil-Cost Options to Key Executives

Softcat plc has announced the granting of nil-cost options under its Annual and Deferred Bonus Plan to key executives, Graham Charlton and Katy Mecklenburgh. These options, which are contingent on continued employment, aim to align management incentives with company performance and are set to vest in 2028, potentially impacting the company’s long-term strategic goals and stakeholder interests.

Softcat PLC Announces Block Listing Application for Share Issuance

Softcat PLC has applied for a block listing of 1,250,000 ordinary shares on the UK Listing Authority’s Official List, with admission expected on 27 November 2025. These shares are linked to the company’s Long Term Incentive Plan and Annual and Deferred Bonus Plan, allowing participants to receive shares upon the vesting of awards, potentially impacting the company’s equity structure and stakeholder interests.

Softcat Reports Strong Q1 2026 Growth

Softcat plc reported strong double-digit growth in both gross profit and underlying operating profit for the first quarter ending 31 October 2025. The company’s success is attributed to broad-based growth across technology areas and customer segments, with continued demand reflecting its unique culture and strategic investments. This performance aligns with the company’s previous outlook and highlights its ability to capture significant growth opportunities in a large and expanding market.

Softcat Executives Acquire Partnership Shares, Reinforcing Stakeholder Confidence

Softcat plc announced transactions involving its CEO, Graham Charlton, and CFO, Katy Mecklenburgh, who have both purchased partnership shares under the company’s Share Incentive Plan. These transactions, conducted on the London Stock Exchange, reflect the company’s ongoing commitment to aligning its leadership’s interests with those of its shareholders, potentially strengthening stakeholder confidence in the company’s management and future direction.

Softcat Publishes 2025 Annual Report and Announces AGM Details

Softcat has released its 2025 Annual Report and Accounts along with the Notice of its Annual General Meeting, which will take place on December 15, 2025. The documents are available on the company’s website and have been submitted to the Financial Conduct Authority for public inspection. The report includes key information on the principal risks and uncertainties faced by the company, the Directors’ responsibility statement, and related party transactions, providing stakeholders with comprehensive insights into the company’s financial health and strategic direction.

Softcat plc Announces Total Voting Rights and Share Capital Update

Softcat plc has announced its total voting rights and share capital as of October 31, 2025, which consists of 199,947,510 ordinary shares with voting rights. This disclosure is in accordance with the FCA’s Disclosure Guidance and Transparency Rules, allowing shareholders to determine their notification requirements regarding their interests in the company.

Softcat Achieves Record Performance and Strategic Growth in FY2025

Softcat plc reported another year of record performance for the fiscal year ending July 31, 2025, with significant growth across key financial metrics. The company achieved a 26.8% increase in gross invoiced income and an 18.3% rise in gross profit, driven by strong performance in its base business and larger solutions projects. Softcat also completed its first acquisition, purchasing Oakland, a data and AI consultancy, to enhance its capabilities in a growing market segment. The company’s strategic investments in IT, data, digital projects, and new systems aim to support future growth, while maintaining a strong cash position and increasing dividends for shareholders. Looking ahead, Softcat is well-positioned to continue its growth trajectory by capturing additional market share and delivering on large projects, with expectations of first-half weighted operating profit growth in FY2026.

Softcat Executives Acquire Shares Under Incentive Plan

Softcat plc announced transactions involving the purchase of partnership shares by its CEO, Graham Charlton, and CFO, Katy Mecklenburgh, under the company’s Share Incentive Plan. These transactions, conducted on the London Stock Exchange, reflect the company’s ongoing commitment to aligning management interests with shareholder value, potentially impacting the company’s market perception and stakeholder confidence.

Softcat Executives Acquire Shares Under Incentive Plan

Softcat plc has announced transactions involving the purchase of partnership shares by its CEO, Graham Charlton, and CFO, Katy Mecklenburgh, under the company’s Share Incentive Plan. These transactions, conducted on the London Stock Exchange, reflect the executives’ commitment to the company’s growth and align their interests with those of the shareholders, potentially enhancing investor confidence.