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Regardless of troublesome market circumstances, I feel this info expertise share is a prime development inventory to contemplate in October. Right here’s why.
An enormous alternative
Evidently not a day goes by when information of one other main cyberattack hits the headlines. This week, Japanese beer big Asahi introduced a success that downed manufacturing throughout its factories, inflicting a widespread product scarcity within the nation.
Different vital assaults in 2025 alone have sabotaged operations and stolen knowledge at Jaguar Land Rover, Marks & Spencer, UnitedHealth and Astral Meals. As this listing exhibits, hackers aren’t limiting their assaults to sure sectors or areas, that means firms the world over must be vigilant in opposition to such threats.
This leaves an unlimited alternative for software program firms like Softcat (LSE:SCT). Some analysts imagine the worldwide cybersecurity market may broaden at an compound annual fee of 10% from now to 2033.
Softcat supplies a variety of IT functions for companies. This contains cloud companies, networking, connectivity and software program licensing. However it’s within the subject of cyber safety the place its shoppers are displaying the best curiosity.
The FTSE 250 firm has mentioned that “our annual buyer expertise survey highlighted cyber safety as the most typical buyer precedence, reflecting the relentless growth of recent cyber threats and the necessity to defend proliferating and more and more delicate knowledge and working methods.”
Reflecting this, Softcat mentioned robust demand on this phase drove gross revenue development of 12.1% within the first half of its monetary 12 months (August-January).
Spectacular development
What I like about Softcat is its diversified strategy throughout totally different IT segments. Not solely does this present a large number of the way to capitalise on the booming digital economic system and development segments like cybersecurity. It additionally leaves it higher positioned to defend and develop income if explicit areas come beneath strain.
This broad wingspan has delivered sturdy and constant annual bottom-line development over the past 5 years. In monetary 2020, it recorded earnings per share (EPS) of 38.2p per share. Final 12 months this had leapt to 59.7p per share.
Metropolis analysts expect Softcat’s proud document of earnings enchancment to proceed, too.
| Monetary Yr To July… | EPS | Annual development |
|---|---|---|
| 2025 | 68.1p | 14% |
| 2026 | 71.5p | 5% |
| 2027 | 78.2p | 9% |
A prime tech inventory
In fact there are risks to those forecasts. Powerful financial circumstances in its markets may impression gross sales if firms in the reduction of on spending. This may occasionally not impression important areas like cybersecurity, however demand for its different companies may disappoint.
On prime of this, Softcat faces not-insignificant competitors throughout its markets. This contains from heavyweight US expertise firms which have deeper pockets and stronger model energy.
However this UK development inventory has proved it has what it takes to thrive regardless of these dangers, as these robust half-year outcomes I discussed present. Softcat shares have delivered a median annual return of twenty-two% over the past decade. I’m anticipating it to stay a prime inventory for long-term buyers to contemplate.
