Softcat (SCT) AI Stock Analysis

• Market Cap: £3.08B
• Dividend Yield: 1.88%
• Average Volume (3M): 274.87K
• Price to Earnings (P/E): 25.2
• Beta (1Y): 0.56
• Revenue Growth: 10.75%
• EPS Growth: 10.61%
• Country: UK
• Employees: 2,509
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 0.29
• Shares Outstanding: 199,946,260
• 10 Day Avg. Volume: 254,221
• 30 Day Avg. Volume: 274,867
• PEG Ratio: N/A
• 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: £1,760.56
• Price Target Upside: 13.80% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10

• Rating: 69 Neutral
• Price Target: 1,714.00p ▲(10.80% Upside)

Softcat's overall stock score reflects strong financial performance and prudent management, which are offset by neutral technical indicators and a high valuation. The company's robust profitability and low leverage are significant strengths, but the current market momentum and valuation metrics suggest limited short-term upside.

Positive Factors

Strong Profitability

The consistent increase in gross profit margin indicates effective cost management and operational efficiency, which are crucial for sustaining long-term profitability and competitive advantage.

Low Leverage

Low leverage reduces financial risk and enhances the company's ability to invest in growth opportunities, ensuring long-term financial stability and flexibility.

Solid Cash Flow Generation

Strong cash flow generation supports ongoing operations and strategic investments, enabling the company to maintain growth and shareholder returns over time.

Negative Factors

Revenue Growth Fluctuations

Fluctuations in revenue growth can indicate challenges in market expansion or competitive pressures, potentially impacting long-term growth prospects if not addressed.

Investing and Financing Cash Flow Fluctuations

Inconsistent cash flows from investing and financing activities may signal challenges in capital allocation, which could affect the company's ability to fund strategic initiatives effectively.

Recent Revenue Decline

A recent decline in revenue growth may indicate short-term market challenges or competitive pressures, which could affect the company's ability to sustain its growth momentum if not addressed.

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 primarily through the sale of IT products and services. Its key revenue streams include direct sales of software licenses, hardware sales, and the provision of managed services and consultancy. The company earns commissions and margins on the products it resells, leveraging partnerships with major technology providers such as Microsoft, Cisco, and Dell. Additionally, Softcat benefits from recurring revenue through maintenance contracts and subscription-based services. The company's strong customer relationships and a focus on customer service contribute significantly to its earnings, as satisfied clients often lead to repeat business and referrals.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 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: Negative
• Last Price: 1547.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 1547 is below the 20-day moving average (MA) of 1592.35, below the 50-day MA of 1599.58, and below the 200-day MA of 1618.65, indicating a bearish trend. The MACD of -5.69 indicates Positive momentum. The RSI at 39.23 is Neutral, neither overbought nor oversold. The STOCH value of 25.20 is Neutral, 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	75 Outperform	2.55B	16.19	21.08%	2.66%	21.86%	0.86%
SCT	69 Neutral	£3.08B	25.21	47.63%	1.88%	10.75%	10.61%
TRD	67 Neutral	56.62M	32.73	35.69%	1.85%	52.51%	0.00%
FDM	65 Neutral	138.19M	8.44	30.45%	17.80%	-27.01%	-49.07%
RCN	57 Neutral	209.14M	350.00	0.00%	2.74%	3.57%	0.00%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Softcat Corporate Events

Softcat Executives Acquire Partnership Shares, Signaling Confidence in Company’s Future

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 the London Stock Exchange, reflect the executives’ commitment to the company’s growth and align their interests with those of the shareholders. This move is likely to strengthen stakeholder confidence and demonstrate leadership’s confidence in the company’s future performance.

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 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.