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Regardless of tough market situations, I feel this info expertise share is a high progress inventory to think about 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 large Asahi introduced successful 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 information at Jaguar Land Rover, Marks & Spencer, UnitedHealth and Astral Meals. As this record exhibits, hackers aren’t limiting their assaults to sure sectors or areas, that means corporations the world over should be vigilant in opposition to such threats.
This leaves an unlimited alternative for software program corporations like Softcat (LSE:SCT). Some analysts consider the worldwide cybersecurity market might develop at an compound annual fee of 10% from now to 2033.
Softcat offers a variety of IT purposes for companies. This consists of cloud companies, networking, connectivity and software program licensing. However it’s within the area of cyber safety the place its shoppers are exhibiting 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 information and working programs.”
Reflecting this, Softcat mentioned sturdy demand on this phase drove gross revenue progress of 12.1% within the first half of its monetary 12 months (August-January).
Spectacular progress
What I like about Softcat is its diversified strategy throughout totally different IT segments. Not solely does this present a large number of how to capitalise on the booming digital economic system and progress segments like cybersecurity. It additionally leaves it higher positioned to defend and develop income if explicit areas come underneath stress.
This broad wingspan has delivered sturdy and constant annual bottom-line progress 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 report of earnings enchancment to proceed, too.
| Monetary Yr To July… | EPS | Annual progress |
|---|---|---|
| 2025 | 68.1p | 14% |
| 2026 | 71.5p | 5% |
| 2027 | 78.2p | 9% |
A high tech inventory
After all there are risks to those forecasts. Powerful financial situations in its markets might influence gross sales if corporations reduce on spending. This will likely not influence important areas like cybersecurity, however demand for its different companies might disappoint.
On high of this, Softcat faces not-insignificant competitors throughout its markets. This consists of from heavyweight US expertise corporations which have deeper pockets and stronger model energy.
However this UK progress inventory has proved it has what it takes to thrive regardless of these dangers, as these sturdy 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 high inventory for long-term traders to think about.
