Softcat (SF5) AI Stock Analysis

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Softcat

(Frankfurt:SF5)

Rating:―N/A

Action:N/A

Date:―

No summary available

Positive Factors

Broad-based growthStrong growth across revenue, gross profit and multiple technology categories indicates broad customer demand rather than reliance on one product line. This diversified expansion can reinforce Softcat’s scale, vendor relevance and ability to fund continued investment over the next several quarters.

Negative Factors

Structural margin pressureThe lower gross profit rate shows that strong volume growth is not translating fully into margin expansion. Mix toward lower-margin products, large solutions projects and Microsoft-related changes could continue to constrain profitability unless higher-value services and vendor economics offset the pressure.

Softcat (SF5) vs. iShares MSCI Germany ETF (EWG)

Market Cap: EUR 3.50B
Dividend Yield: 2.75%
Average Volume (3M): 430
Price to Earnings (P/E): 21.4
Beta (1Y): 0.38
Revenue Growth: 31.68%
EPS Growth: 10.56%
Country: Germany
Employees: 2,925
Sector: Technology
Sector Strength: 61
Industry: Information Technology Services

Softcat Business Overview & Revenue Model

Company Description

Softcat plc, a UK-based company established in 1987 with headquarters in Marlow, operates as a leading value-added IT reseller and provider of IT infrastructure solutions. Serving both commercial enterprises and public sector entities across the Unit...

Softcat Earnings Call Summary

Earnings Call Date:Oct 13, 2026(Q4-2026)|% Change Since:-11.01%|Next Earnings Date:Mar 23, 2027

Earnings Call SentimentPositive

The call was strongly positive, characterized by exceptional FY2026 growth, broad-based customer and portfolio performance, strong cash generation, employee engagement gains, continued investment, and confidence in the AI, international, and GDT opportunities. The main negatives were lower gross profit margins, operating costs growing faster than gross profit, elevated one-off and acquisition-related costs, tougher FY2027 comparisons, ongoing memory constraints and customer spending scrutiny, and temporarily higher leverage. Highlights significantly outweighed the lowlights.

Positive Updates

Exceptional FY2026 Growth and Profitability

Gross profit grew 24.7% to GBP 616.3 million, underlying operating profit increased 19.4% to GBP 215.1 million, and underlying basic earnings per share rose 19.7% to GBP 0.832. Management said growth was ahead of expectations at the start of the year.

Negative Updates

Gross Profit Margin Rate Decline

Overall gross profit as a percentage of gross invoiced income declined by 60 basis points year-on-year, reflecting a mix shift into lower-margin products, the impact of Microsoft EA changes, and the diluted impact of large solutions projects at lower margin.

Company Guidance

For FY 2027, excluding the contribution from GDT, the Board expects “high single-digit underlying operating profit growth,” “slightly ahead of gross profit growth”; GP is expected to be “first half-weighted,” while underlying operating profit is expected to be “more balanced across the year.” Non-underlying costs are expected to increase by “around two to two and a half times,” while absolute costs are expected to go down, with “a marginal increase” after excluding the “low teens” one-off cost in H2 FY 2026; headcount growth is expected to be “1-2 percentage points” higher than the 10.8% average headcount growth in FY 2026. Microsoft’s changes are “factored into our forward guidance” and expected to be “a slight net positive,” and estimated net debt leverage following completion of GDT is forecast to be 1.3x and “expected to be below 1x by July 2028,” against a target of 0.5x-1x.

Softcat Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

DE:SF5 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GB:MTEC	74Outperform	GBP 82.85M	22.75	20.21%	―	26.81%	150.54%
GB:TRD	73Outperform	GBP 68.05M	39.27	35.58%	2.31%	15.70%	-4.34%
GB:RCN	70Neutral	GBP 93.36M	2.39	20.35%	―	-2.33%	244.80%
Sector *	61Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
GB:FDM	59Neutral	GBP 110.84M	47.81	4.84%	6.42%	-25.95%	-83.91%
GB:CCC	57Neutral	GBP 5.29B	24.86	21.78%	1.62%	53.51%	28.32%

* Technology Sector Average

Performance Comparison

DE:SF5 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
DE:SF5	Softcat plc	19.40	2.73	16.38%
GB:CCC	Computacenter plc	4824.00	2075.21	75.50%
GB:FDM	FDM Group (Holdings)	109.00	-7.22	-6.22%
GB:RCN	Redcentric plc	98.00	-25.00	-20.33%
GB:TRD	Triad Group plc	390.00	112.68	40.63%
GB:MTEC	Made Tech Group PLC	53.00	20.00	60.61%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Softcat AI Stock Analysis