Arcontech (ARC) AI Stock Analysis

9 Followers

Arcontech

(LSE:ARC)

Select Model

Rating:74Outperform

Price Target:GBX 92.00▲(17.20% Upside)

Action:reiterated

Date:09/17/26

The score is primarily driven by strong financial fundamentals (high margins, strong cash conversion, and very low leverage), supported by a reasonable P/E and a high dividend yield. Offsetting factors are weaker recent operating trends (latest-year revenue and free-cash-flow declines) and soft technical momentum (negative MACD and sub-50 RSI).

Positive Factors

High ProfitabilityExceptionally high gross margins and consistently strong net margins indicate an asset-light software model with substantial economic profitability. This margin structure can support reinvestment, customer support, and resilience across the next several quarters, provided revenue stability improves.

Negative Factors

Recent Revenue ContractionThe latest revenue decline shows that the company’s highly profitable model is currently operating against weaker top-line momentum. If contraction persists, it could reduce operating leverage, limit reinvestment capacity, and make sustained earnings growth more difficult over the coming quarters.

Arcontech (ARC) vs. iShares MSCI United Kingdom ETF (EWC)

Market Cap: GBP 10.50M
Dividend Yield: 5.10%
Average Volume (3M): 16.41K
Price to Earnings (P/E): 12.6
Beta (1Y): 0.08
Revenue Growth: -11.46%
EPS Growth: -11.47%
Country: UK
Employees: 18
Sector: Technology
Sector Strength: 61
Industry: Software - Application

Arcontech Business Overview & Revenue Model

Company Description

Arcontech Group plc, a company based in London, United Kingdom, has been developing and marketing its proprietary software solutions since its founding in 1979. Its operations and sales extend across a wide geographical area, including the UK, the re...

Arcontech Financial Statement Overview

Summary

Strong overall financial quality supported by exceptionally high gross margins, solid net margins, strong earnings-to-free-cash-flow conversion, and very low leverage. The main drag is the latest-year downturn: revenue contracted (-9.4%) and free cash flow fell materially (-32.0%), indicating weaker recent momentum.

Income Statement

74Positive

Balance Sheet

88Very Positive

Cash Flow

77Positive

Financial statement breakdown
Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	2.75M	2.75M	3.11M	2.91M	2.73M	2.76M
Gross Profit	2.63M	2.63M	3.11M	2.91M	2.58M	2.76M
EBITDA	803.28K	629.74K	896.92K	1.25M	1.14M	925.78K
Net Income	835.99K	835.99K	943.43K	1.07M	980.11K	610.57K
Balance Sheet
Total Assets	10.63M	10.63M	10.82M	10.56M	9.03M	8.78M
Cash, Cash Equivalents and Short-Term Investments	7.52M	7.52M	7.40M	7.16M	6.41M	6.03M
Total Debt	307.70K	307.70K	427.36K	537.67K	40.32K	195.85K
Total Liabilities	1.59M	1.59M	2.09M	2.30M	1.42M	1.80M
Stockholders Equity	9.04M	9.04M	8.73M	8.27M	7.61M	6.97M
Cash Flow
Free Cash Flow	778.86K	778.86K	597.31K	1.02M	974.92K	1.12M
Operating Cash Flow	784.63K	784.63K	606.41K	1.04M	978.40K	1.12M
Investing Cash Flow	-5,771	-5,771	240.71K	236.26K	73.50K	11.22K
Financing Cash Flow	-654.58K	-654.58K	-611.79K	-522.92K	-590.14K	-487.18K

Arcontech Technical Analysis

Technical Analysis SentimentNeutral

Last Price78.50

Price Trends

50DMA79.34Negative

100DMA77.80Positive

200DMA75.94Positive

Market Momentum

MACD-0.53Positive

RSI28.50Positive

STOCH32.88Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:ARC, the sentiment is Neutral. The current price of 78.50 is below the 20-day moving average (MA) of 80.10, below the 50-day MA of 79.34, and above the 200-day MA of 75.94, indicating a neutral trend. The MACD of -0.53 indicates Positive momentum. The RSI at 28.50 is Positive, neither overbought nor oversold. The STOCH value of 32.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:ARC.

Arcontech Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

GB:ARC against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GB:ING	74Outperform	GBP 10.11M	8.00	16.63%	6.77%	-0.48%	-34.98%
GB:ARC	74Outperform	GBP 10.50M	12.56	9.48%	5.10%	-11.46%	-11.47%
Sector *	61Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
GB:ZOO	57Neutral	GBP 15.24M	-14.04	-9.48%	―	-4.46%	77.67%
GB:BIRD	55Neutral	GBP 18.73M	-7.82	-39.59%	―	-10.28%	9.84%
GB:PEN	50Neutral	GBP 15.24M	-16.93	-13.64%	―	0.91%	81.47%

* Technology Sector Average

Performance Comparison

GB:ARC and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
GB:ARC	Arcontech Group plc	78.50	-9.19	-10.49%
GB:BIRD	Blackbird PLC	4.30	1.60	59.26%
GB:ING	Ingenta plc	66.50	-18.74	-21.99%
GB:PEN	Pennant International	32.00	10.50	48.84%
GB:ZOO	Zoo Digital	16.50	6.25	60.98%

Arcontech Corporate Events

Financial DisclosuresRegulatory Filings and ComplianceShareholder Meetings

Arcontech Posts Annual Report and Sets Date for 2026 AGM

Neutral

Sep 23, 2026

Arcontech has posted its Annual Report and Accounts for the year ended 30 June 2026, along with the notice of its Annual General Meeting, to shareholders, and will make the documents available on its website later today. The AGM is scheduled to take...

Business Operations and StrategyDividendsFinancial Disclosures

Arcontech cushions revenue fall with strong cash, new European wins

Neutral

Sep 14, 2026

Arcontech reported an 11.5% decline in annual revenue to £2.75 million and a 10.7% drop in pre-tax profit to £881,170, as the loss of a long-standing customer and weaker one-off sales outweighed new business wins. Recurring revenue now accounts for 9...

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.

Date of analysis: Sep 17, 2026

Arcontech AI Stock Analysis