Softcat (SCT) AI Stock Analysis

• Market Cap: £3.32B
• Dividend Yield: 0.54%
• Average Volume (3M): 340.69K
• Price to Earnings (P/E): 26.4
• Beta (1Y): 0.64
• Revenue Growth: 10.75%
• EPS Growth: 10.61%
• Country: UK
• Employees: 2,509
• Sector: Technology
• Sector Strength: 94
• Industry: Information Technology Services
• EPS (TTM): 0.29
• Shares Outstanding: 199,946,260
• 10 Day Avg. Volume: 264,715
• 30 Day Avg. Volume: 340,689
• PEG Ratio: 5.30
• Price to Book (P/B): 11.82
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 25.80
• 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: £1,702.00
• Price Target Upside: 1.67% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

• Rating: 72 Outperform
• Price Target: 18.50p ▼(-98.89%Downside)

Softcat's overall stock score is bolstered by its strong financial performance and positive corporate events, which reflect management's confidence. The valuation is less attractive due to a high P/E ratio, but the significant dividend yield offers compensation. Technical analysis indicates cautious market sentiment.

Positive Factors

Earnings

The company notes that the group 'continued to perform well during the Period, delivering strong double-digit year-on-year growth in gross profit and operating profit'.

Outlook

The Board is pleased with progress so far this year and, in part driven by the contribution of larger deals, has upgraded the FY25 outlook to low-teens growth in operating profit.

Negative Factors

Complexity

A model refresh is a reminder that complexity starts to tick higher from here; the simplicity of an organic growth company is gone.

Valuation

Softcat is trading at a higher valuation compared to both its peer group and the broader European IT Services sector, suggesting a premium perception in the market.

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 makes money by selling IT infrastructure products and services to its customers. Its revenue model comprises several key streams: sales of software licenses from major vendors like Microsoft, Adobe, and VMware; hardware sales including computers, servers, and networking equipment; and professional services such as consulting, managed services, and technology implementation. The company also generates income from cloud services, providing customers with access to cloud-based solutions and platforms. Partnerships with leading technology vendors play a critical role in Softcat's earnings, allowing it to offer competitive pricing and access to the latest technology innovations. Additionally, Softcat benefits from its strong customer relationships and a reputation for excellent customer service, which contribute to repeat business and long-term contracts.

Softcat Financial Statement Overview

Summary

Softcat exhibits strong financial performance with robust profitability, low financial leverage, and solid cash flow generation. Despite minor fluctuations in revenue growth, the company's effective cost management and prudent financial strategies are commendable.

Income Statement

Softcat demonstrates strong profitability with a consistent increase in gross profit margin from 21.3% to 43.2% over the years, reflecting effective cost management. The net profit margin has also shown stability, averaging around 10-12%. Despite a slight decline in revenue growth recently, the overall trajectory has been positive with revenues recovering from a dip in 2021. EBIT and EBITDA margins are robust, indicating healthy operational efficiency.

Balance Sheet

The company's balance sheet is strong, with a low debt-to-equity ratio, consistently below 0.05, signifying low leverage and financial risk. Return on equity has improved significantly, showing effective utilization of shareholders' funds. The equity ratio has remained stable at around 38-40%, indicating a healthy proportion of equity financing.

Cash Flow

Softcat's cash flow performance is solid, with a notable increase in free cash flow over the years, indicating improved cash generation capability. The operating cash flow to net income ratio is generally above 1, showing strong cash conversion. However, fluctuations in investing and financing cash flows suggest a need for careful management in capital allocation.

Breakdown	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	962.63M	985.30M	1.08B	784.05M	1.08B
Gross Profit	417.75M	372.31M	326.65M	276.06M	235.47M
EBITDA	166.47M	145.96M	143.61M	124.24M	98.90M
Net Income	119.04M	112.03M	110.41M	96.19M	75.66M
Balance Sheet
Total Assets	780.75M	647.72M	672.06M	497.36M	430.95M
Cash, Cash Equivalents and Short-Term Investments	158.45M	122.62M	97.32M	101.72M	80.14M
Total Debt	10.36M	9.76M	6.67M	8.30M	9.84M
Total Liabilities	482.71M	396.28M	460.96M	318.21M	290.20M
Stockholders Equity	298.04M	251.44M	211.10M	179.14M	140.75M
Cash Flow
Free Cash Flow	120.27M	102.79M	78.89M	85.01M	55.67M
Operating Cash Flow	115.61M	106.04M	84.11M	91.48M	64.63M
Investing Cash Flow	-1.35M	-3.25M	-5.22M	-6.46M	-8.96M
Financing Cash Flow	-78.42M	-77.28M	-86.86M	-63.43M	-54.80M

Softcat Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1674.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SCT, the sentiment is Neutral. The current price of 1674 is below the 20-day moving average (MA) of 1702.35, below the 50-day MA of 1768.20, and above the 200-day MA of 1616.65, indicating a neutral trend. The MACD of -31.52 indicates Positive momentum. The RSI at 42.19 is Neutral, neither overbought nor oversold. The STOCH value of 57.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:SCT.

Softcat Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SCT	72 Outperform	£3.32B	26.45	47.63%	0.54%	10.75%	10.61%
TRD	72 Outperform	£52.26M	30.21	41.96%	2.67%	52.51%	―
Sector *	68 Neutral	¥228.96B	14.53	7.50%	2.69%	9.28%	6.70%
CCC	67 Neutral	£2.39B	14.78	19.50%	4.15%	0.61%	-9.17%
FDM	66 Neutral	£229.03M	11.16	28.48%	5.97%	-22.84%	-49.60%
RCN	57 Neutral	£197.98M	319.23	1.06%	3.85%	3.57%	―
FDP	56 Neutral	£542.72M	―	-11.89%	―	-22.83%	-350.82%

Softcat Corporate Events

Softcat Executives Acquire Shares, Signaling Confidence in Company Growth

Softcat plc announced transactions involving its CEO, Graham Charlton, and CFO, Katy Mecklenburgh, who both purchased Partnership Shares under the company’s Share Incentive Plan. These transactions, conducted on 7 July 2025 at the London Stock Exchange, reflect the executives’ confidence in the company’s future performance and align with Softcat’s strategy to incentivize management through equity participation.

The most recent analyst rating on (GB:SCT) stock is a Hold with a £1595.00 price target. To see the full list of analyst forecasts on Softcat stock, see the GB:SCT Stock Forecast page.

Softcat Announces Total Voting Rights Update

Softcat plc announced that as of 30 June 2025, its share capital consists of 199,946,262 ordinary shares, each with voting rights. This information is crucial for shareholders to determine their interest or changes in interest in the company, as per the FCA’s Disclosure Guidance and Transparency Rules.

The most recent analyst rating on (GB:SCT) stock is a Hold with a £1595.00 price target. To see the full list of analyst forecasts on Softcat stock, see the GB:SCT Stock Forecast page.

Softcat Executives Acquire Shares, Signaling Confidence in Growth

Softcat plc has 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 executives’ commitment to the company’s growth and align their interests with those of shareholders, potentially enhancing stakeholder confidence.

The most recent analyst rating on (GB:SCT) stock is a Hold with a £1595.00 price target. To see the full list of analyst forecasts on Softcat stock, see the GB:SCT Stock Forecast page.

Softcat Announces Total Voting Rights and Share Capital Details

Softcat plc has announced its total voting rights and share capital details as of May 30, 2025, in compliance with the Disclosure Guidance and Transparency Rules. The company has 199,937,195 ordinary shares with voting rights, which stakeholders can use to assess their shareholding interests under the FCA’s regulations.

The most recent analyst rating on (GB:SCT) stock is a Hold with a £1595.00 price target. To see the full list of analyst forecasts on Softcat stock, see the GB:SCT Stock Forecast page.

Softcat Reports Strong Q3 2025 Growth and Positive Full-Year Outlook

Softcat plc reported strong double-digit growth in both gross and operating profits for the third quarter of 2025, driven by broad-based growth across technology areas and customer segments. The company expects low-teens growth in operating profit for the full year, reflecting the contribution from larger deals, which indicates a positive outlook and strong market positioning.

The most recent analyst rating on (GB:SCT) stock is a Buy with a £18.50 price target. To see the full list of analyst forecasts on Softcat stock, see the GB:SCT Stock Forecast page.

Softcat Director Joins Domino’s Pizza Group Board

Softcat plc has announced that Robyn Perriss, a Non-Executive Director of the company, will join the Board of Domino’s Pizza Group plc as a Non-Executive Director starting 1 July 2025. This appointment reflects the recognition of Perriss’s expertise and may enhance Softcat’s industry connections and influence, potentially benefiting its strategic positioning.

The most recent analyst rating on (GB:SCT) stock is a Buy with a £18.50 price target. To see the full list of analyst forecasts on Softcat stock, see the GB:SCT Stock Forecast page.

Softcat Executives Acquire Shares to Strengthen Stakeholder Confidence

Softcat plc announced transactions involving its CEO, Graham Charlton, and CFO, Katy Mecklenburgh, who purchased partnership shares under the company’s Share Incentive Plan. These transactions, conducted on the London Stock Exchange, reflect a strategic move to align the interests of key executives with the company’s performance, potentially impacting stakeholder confidence and market perception.

Softcat Announces Total Voting Rights and Share Capital Details

Softcat plc has announced its total voting rights and share capital details as of April 30, 2025, in compliance with the Disclosure Guidance and Transparency Rules. The company has 199,928,451 ordinary shares with voting rights, which shareholders can use as a denominator for calculating their interest in the company.