Softcat plc's (LON:SCT) Intrinsic Value Is Potentially 20% Below Its Share Price
Nov 27
U.K. (FTSE) IT Industry Analysis
UpdatedNov 29, 2022
DataAggregated Company Financials
Companies43
- 7D4.4%
- 3M16.8%
- 1Y-26.9%
- YTD-24.1%
Over the last 7 days, the IT industry has risen 4.4%, driven by gains from Kaspi.kz of 8.3%. In contrast, the industry has lost 27% in the last 12 months. Earnings are forecast to grow by 23% annually.
Industry Valuation and Performance
Has the U.K. IT Industry valuation changed over the past few years?
| Date | Market Cap | Revenue | Earnings | PE | Absolute PE | PS |
|---|---|---|---|---|---|---|
| Wed, 30 Nov 2022 | UK£38.8b | UK£21.7b | UK£1.8b | 30.4x | 22x | 1.8x |
| Fri, 28 Oct 2022 | UK£35.4b | UK£21.6b | UK£1.8b | 27.1x | 19.9x | 1.6x |
| Sun, 25 Sep 2022 | UK£32.8b | UK£21.7b | UK£1.7b | 26x | 19.8x | 1.5x |
| Tue, 23 Aug 2022 | UK£32.4b | UK£20.6b | UK£1.6b | 28.7x | 19.8x | 1.6x |
| Thu, 21 Jul 2022 | UK£29.5b | UK£20.5b | UK£1.8b | 29.5x | 16.5x | 1.4x |
| Sat, 18 Jun 2022 | UK£19.3b | UK£18.1b | UK£805.9m | 35.3x | 24x | 1.1x |
| Mon, 16 May 2022 | UK£19.9b | UK£17.9b | UK£790.1m | 33.4x | 25.2x | 1.1x |
| Wed, 13 Apr 2022 | UK£25.5b | UK£17.9b | UK£782.6m | 35.7x | 32.6x | 1.4x |
| Fri, 11 Mar 2022 | UK£24.7b | UK£17.3b | UK£800.1m | 31.2x | 30.9x | 1.4x |
| Sun, 06 Feb 2022 | UK£27.3b | UK£17.2b | UK£770.9m | 36.3x | 35.4x | 1.6x |
| Tue, 04 Jan 2022 | UK£30.2b | UK£15.5b | UK£773.3m | 41.7x | 39.1x | 2x |
| Thu, 02 Dec 2021 | UK£30.3b | UK£15.4b | UK£744.1m | 42.6x | 40.7x | 2x |
| Sat, 30 Oct 2021 | UK£30.1b | UK£15.2b | UK£729.4m | 44.1x | 41.3x | 2x |
| Mon, 27 Sep 2021 | UK£31.4b | UK£13.9b | UK£703.3m | 47.7x | 44.7x | 2.3x |
| Wed, 25 Aug 2021 | UK£31.3b | UK£13.9b | UK£661.1m | 46.6x | 47.4x | 2.3x |
| Thu, 01 Jul 2021 | UK£19.0b | UK£13.5b | UK£630.2m | 40.4x | 30.2x | 1.4x |
| Sun, 04 Apr 2021 | UK£18.9b | UK£13.1b | UK£462.0m | 42.2x | 40.8x | 1.4x |
| Wed, 06 Jan 2021 | UK£16.5b | UK£9.4b | UK£289.1m | 44x | 57.1x | 1.8x |
| Sat, 10 Oct 2020 | UK£14.0b | UK£9.2b | UK£303.6m | 37.1x | 46.2x | 1.5x |
| Fri, 03 Jul 2020 | UK£13.0b | UK£9.1b | UK£319.3m | 30.4x | 40.8x | 1.4x |
| Mon, 06 Apr 2020 | UK£11.3b | UK£9.0b | UK£324.0m | 26x | 34.9x | 1.3x |
| Thu, 09 Jan 2020 | UK£16.0b | UK£8.9b | UK£338.1m | 30.7x | 47.2x | 1.8x |
Price to Earnings Ratio
44.6x
Current Industry PE
- Investors are pessimistic on the British IT industry, indicating that they anticipate long term growth rates will be lower than they have historically.
- The industry is trading at a PE ratio of 22.0x which is lower than its 3-year average PE of 46.9x.
- The 3-year average PS ratio of 2.1x is higher than the industry's current PS ratio of 1.8x.
Past Earnings Growth
- The earnings for companies in the IT industry have grown 74% per year over the last three years.
- Revenues for these companies have grown 35% per year.
- This means that more sales are being generated by these companies overall, and subsequently their profits are increasing too.
Industry Trends
Which industries have driven the changes within the U.K. Tech industry?
| GB Market | 1.10% | |
| Tech | 2.00% | |
| IT | 4.39% | |
| Data Processing Services | 6.15% | |
| Internet Services and Infrastructure | 2.37% | |
| IT Consulting | 1.14% | |
Industry PE
- Investors are most optimistic about the Internet Services and Infrastructure industry even though it's trading below its 3-year average PE ratio of 126x.
- Analysts are expecting annual earnings growth of 6.3%, which is higher than its past year's earnings decline of 46.5% per year.
- Investors are most pessimistic about the Data Processing Services industry, which is trading below its 3-year average of 105x.
Forecasted Growth
- Analysts are most optimistic on the Data Processing Services industry, expecting annual earnings growth of 30% over the next 5 years.
- This is roughly in line with its past earnings growth rate.
- In contrast, the Internet Services and Infrastructure industry is expected to see its earnings grow by 6.3% per year over the next few years.
Top Stock Gainers and Losers
Which companies have driven the market over the last 7 days?
| Company | Last Price | 7D | 1Y | Valuation | |
|---|---|---|---|---|---|
| KSPI Kaspi.kz | US$76.10 | 6.3% +US$859.0m | -41.0% | PE12.7x | |
| KWS Keywords Studios | UK£28.90 | 4.5% +UK£96.4m | 7.1% | PE55.7x | |
| SCT Softcat | UK£12.87 | 1.9% +UK£47.7m | -30.4% | PE23.2x | |
| NETW Network International Holdings | UK£3.36 | 2.6% +UK£45.8m | 25.7% | PE30x | |
| WISE Wise | UK£6.12 | 0.7% +UK£43.0m | -24.7% | PE190.5x |
