Digital Download – The rally continues

Research evidence excerpt

Digital Download – The rally continues

EUROPE | Software EquityMayResearch24, 2026

Chart 3 - Coverage ValuationDigital Download – The rally continues

JEFe P/E

It was another week of companies across the sector (Sage and Softcat) CY26 CY27 AMS 15x 13x

announcing decent results and share prices responding positively. We BYIT 16x 16x

continue to believe the sector hit peak pessimism back in February and will CAPCCC 21x8x 19x7x

continue to climb the wall of worry. DSY 15x 14x

GBG 11x 10x

NEM 25x 21x

Four in a row: Another solid week for the sector, with the average performance of the 24 SAP 22x 18x

companies we track rising 3.9%. We acknowledge that the broader market – Stoxx Eur 600 SCT 23x 20x

– was also 3% higher, but against a backdrop of negative investor sentiment, any good SGE 17x 15x

. TEMN 18x 17x

news is welcome. Although investors remain cautious, it is interesting that we have now had Source: Jefferies, Factset

four consecutive positive weeks. Looking back, the sector experienced the main downdraft

in the first two months of the year. Since 20 Feb, the average share price performance

of the companies we track is actually +16%. As long as companies continue to deliver on Chart 4 - Coverage Ratings

expectations, which has been the theme of recent results, we expect the sector to continue to Coverage Ratings

AMS BUYgrind higher. The sector is down 6% YTD, so it's tough to declare a victory. However, we are

BYIT HOLDc.3-4 months from investors moving from FY27 to FY28 as the base year for valuations. Given

CAP HOLD

the growth in the sector, we think this will continue to add positive momentum to share prices.

CCC BUY

Middle East resolution: Current headlines suggest the US is close to a resolution in the Middle DSY UNPF

GBG BUYEast.