Softcat (SCT) AI Stock Analysis

• Market Cap: £3.68B
• Dividend Yield: 0.48%
• Average Volume (3M): 274.11K
• Price to Earnings (P/E): 29.4
• Beta (1Y): 0.74
• Revenue Growth: 10.75%
• EPS Growth: 10.61%
• Country: UK
• Employees: 2,509
• Sector: Technology
• Sector Strength: 81
• Industry: Information Technology Services
• EPS (TTM): 0.29
• Shares Outstanding: 199,937,200
• 10 Day Avg. Volume: 195,436
• 30 Day Avg. Volume: 274,109
• PEG Ratio: 14.67
• Price to Book (P/B): 11.89
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 29.07
• 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: £1,687.78
• Price Target Upside: -8.07% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 10

• Rating: 76 Outperform
• Price Target: 2,096.00p ▲(14.16%Upside)

Softcat's robust financial performance and positive corporate events drive its strong stock score. The technical analysis suggests bullish momentum, though there's caution with high valuation metrics. The absence of earnings call data slightly limits the overall assessment.

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'.

Financial Performance

Softcat reported a 'beat-across-the-board' set of 1H25 results, with revenues driven by strong hardware momentum and significant growth in software and services.

Negative Factors

Market Comparison

Softcat is trading on a c15% premium to similar growth companies, so better value is seen elsewhere.

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 is a leading provider of IT infrastructure products and services, catering primarily to businesses in the United Kingdom and Ireland. The company offers a wide range of solutions, including software licensing, hardware, security, networking, and cloud services. Softcat serves a diverse clientele across various sectors such as government, healthcare, education, and corporate enterprises, focusing on delivering value through personalized customer service and expert technical support.

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 shows strong financial performance with robust profitability, low leverage, and solid cash flow generation. Despite some fluctuations in revenue growth, the company effectively manages costs and maintains financial health.

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
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
1.04B	962.63M	985.30M	1.08B	784.05M	1.08B
	Gross Profit
440.60M	417.75M	372.31M	326.65M	276.06M	235.47M
	EBIT
161.00M	154.06M	139.85M	139.08M	119.35M	95.32M
	EBITDA
169.95M	166.47M	145.96M	143.61M	124.24M	98.90M
	Net Income Common Stockholders
125.38M	119.04M	112.03M	110.41M	96.19M	75.66M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
141.04M	158.45M	122.62M	97.32M	101.72M	80.14M
	Total Assets
831.88M	780.75M	647.72M	672.06M	497.36M	430.95M
	Total Debt
28.34M	10.36M	9.76M	6.67M	8.30M	9.84M
	Net Debt
-112.71M	-148.10M	-112.86M	-90.65M	-93.42M	-70.30M
	Total Liabilities
550.97M	482.71M	396.28M	460.96M	318.21M	290.20M
	Stockholders Equity
280.91M	298.04M	251.44M	211.10M	179.14M	140.75M
Cash Flow		Free Cash Flow
128.54M	120.27M	102.79M	78.89M	85.01M	55.67M
	Operating Cash Flow
133.97M	115.61M	106.04M	84.11M	91.48M	64.63M
	Investing Cash Flow
-8.55M	-1.35M	-3.25M	-5.22M	-6.46M	-8.96M
	Financing Cash Flow
-96.85M	-78.42M	-77.28M	-86.86M	-63.43M	-54.80M

Softcat Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1836.00
• 50DMA: Positive
• 100DMA: Positive
• 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 Positive. The current price of 1836 is above the 20-day moving average (MA) of 1812.60, above the 50-day MA of 1723.65, and above the 200-day MA of 1591.80, indicating a bullish trend. The MACD of 32.25 indicates Positive momentum. The RSI at 65.46 is Neutral, neither overbought nor oversold. The STOCH value of 75.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:SCT.

Softcat Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CCC	79 Outperform	£2.67B	16.51	19.50%	3.72%	0.61%	-9.17%
SCT	76 Outperform	£3.68B	29.37	47.63%	0.48%	10.75%	10.61%
FDM	71 Outperform	£232.86M	11.34	28.48%	5.87%	-22.84%	-49.60%
Sector *	62 Neutral	$11.92B	10.03	-7.37%	3.70%	7.32%	-8.25%
RCN	57 Neutral	£198.76M	320.51	1.06%	3.84%	3.57%	―
FDP	56 Neutral	£537.92M	―	-11.89%	―	-22.83%	-350.82%
TRD	48 Neutral	£57.49M	33.23	41.96%	2.42%	26.44%	―

Softcat Corporate Events

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.

Softcat Executives Invest in Company Shares, Signaling 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 the executives’ commitment to the company’s growth and align their interests with shareholders, potentially impacting Softcat’s market perception positively.

Softcat Acquires Oakland Group to Boost Data and AI Capabilities

Softcat has acquired Oakland Group Services Ltd, a data and AI consultancy, to enhance its capabilities in data strategy, governance, architecture, engineering, analytics, and AI. This acquisition strengthens Softcat’s market position by expanding its service offerings to meet the growing demand for data expertise in both corporate and public sectors, and aligns with Softcat’s strategic focus on innovation and automation.

Softcat Announces Total Voting Rights for March 2025

Softcat plc announced its total voting rights as of March 31, 2025, revealing a share capital consisting of 199,924,707 ordinary shares with voting rights. This disclosure is in line with the FCA’s Disclosure Guidance and Transparency Rules, allowing shareholders to calculate their interests in the company accurately.

Softcat Reports Strong First Half 2025 Results, Upgrades Profit Guidance

Softcat plc reported strong financial performance for the first half of 2025, with double-digit growth in gross profit and gross invoiced income. The company upgraded its full-year operating profit guidance, reflecting successful strategic execution and a robust second-half pipeline. Despite challenging trading conditions, Softcat’s growth model and investment in AI and automation position it well for future expansion, with potential for acquisitions to further enhance its offerings.