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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on SCT

Softcat's recent performance has been impacted by macroeconomic uncertainties, which the company has been navigating through strategic investments. Despite reporting record financial results for the year ended July 2025, with an 18.3% increase in gross profit to £494.3 million, concerns about valuation have been raised, with a fair value estimate of UK£12.48, implying potential overpayment at current levels. The company's recent earnings release has not provided significant updates, contributing to a cautious outlook.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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3 UK Dividend Stocks To Consider With At Least 3% Yield

Nov -18

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Ready To Pass On Softcat plc (LON:SCT)? Think Again

Nov -06

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Softcat PLC (FRA:SF5) Full Year 2025 Earnings Call Highlights: Strong Growth Amidst Challenges

Oct -22

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Softcat reports 18.3% gross profit growth, completes first acquisition

Oct -22

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Top UK Dividend Stocks To Consider In October 2025

Oct -17

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Associated British Foods And 2 Other Top UK Dividend Stocks

Sep -18

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Does This Valuation Of Softcat plc (LON:SCT) Imply Investors Are Overpaying?

Aug -21

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Softcat plc's (LON:SCT) Stock Is Going Strong: Is the Market Following Fundamentals?

May -03

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.19%)

6. Segments

Hardware

Expected Growth: 6%

Softcat plc's Hardware segment growth is driven by increasing demand for cloud infrastructure, digital transformation, and cybersecurity solutions. Additionally, the rise of remote work and online learning has boosted sales of laptops, desktops, and peripherals. Furthermore, the company's strong relationships with major vendors and its ability to provide tailored solutions to customers have contributed to its growth.

Software

Expected Growth: 8%

Softcat plc's software segment growth is driven by increasing demand for cloud-based solutions, digital transformation, and cybersecurity needs. The company's strong relationships with major vendors, such as Microsoft and Amazon Web Services, also contribute to its growth. Additionally, Softcat's expertise in IT consulting and managed services helps to drive sales of software solutions, resulting in an 8% growth rate.

Services

Expected Growth: 5%

Softcat plc's 5% growth in services is driven by increasing demand for cloud-based solutions, cybersecurity, and digital transformation. Strong relationships with major vendors, a skilled workforce, and strategic acquisitions also contribute to growth. Additionally, the company's focus on customer satisfaction, efficient delivery, and cost-effective solutions resonates with clients, leading to repeat business and referrals.

7. Detailed Products

IT Infrastructure

Softcat provides a range of IT infrastructure solutions including servers, storage, networking, and virtualization

Cloud Services

Softcat offers cloud services including public, private, and hybrid cloud solutions, as well as cloud migration and management

Cyber Security

Softcat provides cyber security solutions including threat detection, incident response, and security consulting

Digital Workplace

Softcat offers digital workplace solutions including end-user computing, collaboration, and productivity tools

Data and Analytics

Softcat provides data and analytics solutions including data management, business intelligence, and data science

Networking and Communications

Softcat offers networking and communications solutions including network infrastructure, unified communications, and contact center solutions

Managed Services

Softcat provides managed services including IT service management, monitoring, and support

8. Softcat plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Softcat plc operates in the IT infrastructure and services market, where there are few substitutes for its products and services. However, the company faces some threat from cloud-based services and open-source alternatives.

Bargaining Power Of Customers

Softcat plc's customers are largely medium to large-sized businesses, which have limited bargaining power. The company's strong relationships with its customers and its ability to provide customized solutions reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Softcat plc relies on a few large suppliers for its products and services. While the company has some bargaining power due to its scale, suppliers like Microsoft, Cisco, and VMware have significant market power, which can affect Softcat's pricing and margins.

Threat Of New Entrants

The IT infrastructure and services market has high barriers to entry, including significant capital requirements and the need for specialized skills and expertise. This limits the threat of new entrants and allows Softcat plc to maintain its market position.

Intensity Of Rivalry

The IT infrastructure and services market is highly competitive, with several established players competing for market share. Softcat plc faces intense competition from companies like Computacenter, Daisy Group, and CDW, which can lead to pricing pressure and reduced margins.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 3.74%
Debt Cost 3.95%
Equity Weight 96.26%
Equity Cost 7.51%
WACC 7.38%
Leverage 3.88%

11. Quality Control: Softcat plc passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Wise

A-Score: 6.0/10

Value: 4.9

Growth: 9.2

Quality: 8.0

Yield: 0.0

Momentum: 9.0

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Sopra Steria

A-Score: 5.2/10

Value: 8.3

Growth: 5.7

Quality: 5.0

Yield: 4.4

Momentum: 2.5

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Softcat

A-Score: 5.2/10

Value: 2.0

Growth: 5.8

Quality: 8.0

Yield: 3.1

Momentum: 5.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Bechtle

A-Score: 4.8/10

Value: 5.3

Growth: 6.6

Quality: 4.9

Yield: 3.1

Momentum: 5.5

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
TietoEVRY

A-Score: 4.8/10

Value: 6.8

Growth: 1.9

Quality: 1.8

Yield: 9.4

Momentum: 3.0

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Lagercrantz Group

A-Score: 4.4/10

Value: 0.7

Growth: 8.3

Quality: 6.2

Yield: 1.2

Momentum: 5.5

Volatility: 4.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

14.71$

Current Price

14.71$

Potential

-0.00%

Expected Cash-Flows