Stock Analysis & Valuation Netcall plc (NET.L)

• Previous Close: £132.00
• Sector Valuation Confidence Level: Low

Valuation method	Value, £	Upside, %
Artificial intelligence (AI)	68.48	-48
Intrinsic value (DCF)	38.05	-71
Graham-Dodd Method	0.16	-100
Graham Formula	0.58	-100

Strategic Investment Analysis

Company Overview

Netcall plc (LSE: NET.L) is a UK-based software company specializing in low-code development, robotic process automation (RPA), and customer engagement solutions. Founded in 1984 and headquartered in Bedford, the company provides innovative platforms like Liberty Create (low-code application development), Liberty RPA (AI-powered automation), Liberty Connect (cloud messaging), and Liberty Converse (omnichannel contact center). Netcall serves businesses across the UK and internationally, helping them streamline operations and enhance customer experiences through digital transformation. Operating in the competitive Software - Application sector, Netcall differentiates itself with a focus on automation and low-code solutions, catering to enterprises seeking efficiency and scalability. With a market cap of £172.9M and consistent profitability, Netcall remains a niche player in the growing RPA and customer engagement software markets.

Investment Summary

Netcall plc presents a mixed investment case. On the positive side, the company operates in high-growth segments like low-code development and RPA, with a strong balance sheet (£34M cash vs. minimal debt) and consistent profitability (net income of £5.85M in FY 2024). Its negative beta (-0.113) suggests low correlation with broader markets, potentially offering defensive characteristics. However, its small market cap (£172.9M) and limited international presence may constrain growth compared to larger SaaS competitors. The dividend yield (~0.6% based on a 1p/share payout) is modest, making it more appealing for growth-oriented investors. Risks include competition from well-funded global players and reliance on the UK market.

Competitive Analysis

Netcall competes in the low-code automation and customer engagement software space, where it holds a niche position against larger global players. Its competitive advantage lies in its integrated Liberty platform, combining low-code development (Liberty Create) with RPA (Liberty RPA) and omnichannel customer engagement (Liberty Converse). This end-to-end approach allows Netcall to serve mid-market enterprises seeking unified automation solutions. However, the company lacks the scale and brand recognition of major SaaS competitors, limiting its ability to compete for large enterprise deals. Its UK-centric focus (though it operates internationally) contrasts with competitors that have broader geographic reach. Netcall’s financial stability (positive operating cash flow of £14.7M) allows for continued R&D investment, but its growth trajectory may be constrained without significant expansion into new markets or acquisitions.

Major Competitors

• UiPath Inc. (UIPATH): UiPath is a global leader in RPA with a market cap over $10B, offering advanced automation tools and AI integration. Its scale and brand recognition dwarf Netcall’s, but it lacks Netcall’s integrated low-code development and customer engagement offerings. UiPath’s high-growth model comes with significant operating losses, unlike Netcall’s profitability.
• Appian Corporation (APPN): Appian specializes in low-code automation and workflow management, competing directly with Netcall’s Liberty Create. Appian has a stronger US enterprise presence and cloud-native architecture but is less focused on the UK market. Unlike Netcall, Appian operates at a loss, prioritizing growth over profitability.
• NICE Ltd. (NICE): NICE is a leader in cloud-based customer engagement and AI-driven analytics, competing with Netcall’s Liberty Converse. Its global scale and advanced AI capabilities give it an edge, but its solutions are often more expensive and complex than Netcall’s mid-market-focused offerings.
• Pegasystems Inc. (PEGA): Pegasystems offers low-code and CRM solutions overlapping with Netcall’s Liberty platform. Pega’s strong enterprise footprint and AI investments make it a formidable competitor, but its higher cost structure and focus on large deployments leave room for Netcall in the mid-market.
• AVEVA Group plc (AVST.L): AVEVA (now part of Schneider Electric) provides industrial software with some automation overlap. While not a direct competitor, its UK presence and engineering focus could encroach on Netcall’s vertical-specific opportunities. AVEVA’s scale and M&A activity pose long-term competitive risks.