Update shared on 05 Dec 2025
Fair value Decreased 0.033%Analysts have nudged their Softcat price target slightly lower, trimming it by approximately £0.01 per share, as they balance expectations of stronger revenue growth against modestly lower profit margin forecasts and a marginally higher discount rate.
What's in the News
- Softcat reaffirmed earnings guidance for fiscal 2026, maintaining the outlook given in its August trading update while flagging that underlying operating profit growth in FY2025 will be weighted toward the first half due to project phasing (company guidance).
- The company is actively pursuing further acquisitions after its first deal to buy Oakland, a data and AI services firm, aiming at both capability bolt ons and potential international expansion (results presentation).
- Management highlighted the United States as a key strategic market, noting that Softcat could either continue steady organic build out or accelerate growth via acquisition, but only if a culturally aligned management team is found (results presentation).
- The Board recommended a higher final ordinary dividend of 20.4 pence per share for FY2025, taking the total annual dividend to 29.3 pence per share, subject to shareholder approval (company announcement).
- Softcat also proposed a special dividend of 16.1 pence per share, which, if approved, will be paid alongside the final dividend and will lift total capital returned to shareholders since listing to £661.9 million (company announcement).
Valuation Changes
- Fair Value per Share has edged down slightly from £18.27 to £18.27, reflecting a marginally less optimistic intrinsic valuation.
- Discount Rate has risen modestly from 9.13 percent to 9.31 percent, implying a slightly higher required return and risk assessment.
- Revenue Growth Assumption has increased noticeably from around 4.47 percent to 5.63 percent, indicating a stronger outlook for top line expansion.
- Net Profit Margin Forecast has been trimmed from about 10.26 percent to 9.91 percent, pointing to slightly lower expected profitability on future sales.
- Future P/E Multiple has eased marginally from 27.84x to 27.73x, suggesting a small reduction in the valuation multiple applied to projected earnings.
Have other thoughts on Softcat?
Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.
Create NarrativeDisclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.