Softcat (LON:SCT) Posts Earnings Results

Softcat (LON:SCT) released its quarterly earnings data on Wednesday. The company reported GBX 75.80 earnings per share for the quarter, Digital Look Earnings reports. Softcat had a net margin of 7.61% and a return on equity of 46.24%.

Here are the key takeaways from Softcat’s conference call:

• Softcat reported an exceptional FY 2026, with gross profit up 24.7% to £616.3 million and underlying operating profit up 19.4% to £215.1 million. Customer growth accelerated to more than 10,500, while gross profit per customer increased 20.6%.
• Underlying operating costs rose 27.7%, faster than gross profit, reducing the operating-profit-to-gross-profit ratio to 34.9% from 36.4%. Profitability was also affected by lower-margin product mix, Microsoft licensing changes, large lower-margin projects and one-off employee, advisory and incentive costs.
• For FY 2027, management expects high-single-digit underlying operating profit growth excluding GDT, with gross profit growth modestly moderated by tougher comparisons, the absence of unusually large projects and prior-year memory-related order pull-forward. Non-underlying costs are expected to rise roughly two to two-and-a-half times because of GDT acquisition and integration expenses.
• Management sees substantial long-term demand from AI-driven infrastructure investment, including data centers, networking, security, cloud and services. The GDT acquisition is expected to add U.S. and Americas fulfillment, infrastructure expertise and global cross-selling opportunities, although estimated post-deal leverage will initially rise to 1.3x net debt to EBITDA.

Softcat Trading Up 0.2%

Shares of Softcat stock traded up GBX 3 on Friday, hitting GBX 1,700. 1,339,130 shares of the company traded hands, compared to its average volume of 1,776,860. The stock’s 50 day moving average price is GBX 1,929.51 and its 200-day moving average price is GBX 1,742.36. The company has a current ratio of 1.39, a quick ratio of 1.38 and a debt-to-equity ratio of 10.41. Softcat has a 52 week low of GBX 1,083 and a 52 week high of GBX 2,134. The company has a market cap of £3.66 billion, a PE ratio of 24.25, a PEG ratio of 11.51 and a beta of 0.58.

Insider Buying and Selling at Softcat

In other Softcat news, insider Mayank Prakash acquired 2,645 shares of Softcat stock in a transaction that occurred on Friday, October 16th. The stock was bought at an average price of GBX 1,890 per share, with a total value of £49,990.50. Also, insider Graeme Watt acquired 5,291 shares of the company’s stock in a transaction that occurred on Friday, October 16th. The shares were bought at an average cost of GBX 1,890 per share, for a total transaction of £99,999.90. Insiders purchased a total of 12,816 shares of company stock worth $24,246,219 over the last quarter. Insiders own 2.91% of the company’s stock.

Key Softcat News

Here are the key news stories impacting Softcat this week:

• Positive Sentiment: Seven Softcat insiders, including senior directors, collectively bought 12,432 shares at GBX 1,890 each, investing approximately £225,000. The coordinated purchases may signal confidence in the company’s valuation and prospects.
• Positive Sentiment: Berenberg reaffirmed its “Buy” rating and set a GBX 2,400 price target, implying substantial upside from recent trading levels. The recommendation reinforces the case that the recent share-price weakness may have been overdone.
• Positive Sentiment: Recent analysis continues to highlight potential long-term growth in the IT-reseller sector, supported by demand for artificial intelligence and technology services. Softcat stock analysis
• Neutral Sentiment: Softcat issued 12,432 new ordinary shares following director subscriptions, lifting the share count to about 215.7 million. The transactions demonstrate director participation but create a small amount of dilution for existing shareholders. Softcat director equity subscription
• Neutral Sentiment: Jefferies reaffirmed its “Hold” rating, providing a more cautious counterpoint to Berenberg’s bullish stance. Softcat Hold rating
• Negative Sentiment: Investors are focused on the risk of a margin squeeze in the upcoming fiscal-year results. Pressure on profitability could offset otherwise solid revenue growth and weigh on earnings expectations. Softcat faces FY results margin squeeze

Analyst Ratings Changes

SCT has been the subject of several research reports. JPMorgan Chase & Co. upped their price target on shares of Softcat from GBX 1,950 to GBX 2,300 and gave the company an “overweight” rating in a research report on Monday, September 7th. Deutsche Bank Aktiengesellschaft cut shares of Softcat to a “hold” rating and lifted their target price for the company from GBX 1,800 to GBX 2,140 in a research note on Wednesday, August 26th. Jefferies Financial Group reissued a “hold” rating and set a GBX 1,700 target price on shares of Softcat in a research note on Wednesday. Finally, Berenberg Bank reaffirmed a “buy” rating and set a GBX 2,400 price objective on shares of Softcat in a report on Friday. Four equities research analysts have rated the stock with a Buy rating, three have given a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat.com, Softcat presently has a consensus rating of “Hold” and an average target price of GBX 1,993.75.

Softcat Company Profile

Softcat plc operates as a value-added IT reseller and IT infrastructure solutions provider in the United Kingdom. The company advices, procures, designs, implements, and manages technology, such as software licensing, workplace technology, networking, security, and cloud and datacenter for businesses and public sector organizations. It also offers public cloud, collaboration, connectivity, data centre and private cloud, devices, and financial solution services. In addition, the company provides IT asset management, lifecycle solutions, modern management, security, software licensing, supply chain operation, and virtual desktop and application.