Softcat (LON:SCT) Stock Price Down 4.9% – Should You Sell?

Softcat plc (LON:SCT)’s stock price traded down 4.9% during trading on Wednesday. The stock traded as low as GBX 1,708 and last traded at GBX 1,830.41. Approximately 970,430 shares were traded during mid-day trading, a decline of 46% from the average session volume of 1,783,115 shares. The stock had previously closed at GBX 1,924.

Key Headlines Impacting Softcat

Here are the key news stories impacting Softcat this week:

• Positive Sentiment: Softcat reported a strong fiscal 2026, with revenue rising 35.4% and profit increasing 19.4%. The company also raised its dividend, supporting the investment case and indicating confidence in cash generation. Softcat FY2026 profits rise 19.4% as revenue grows 35.4%
• Positive Sentiment: The company is expanding in the United States through its deal with GDT, potentially broadening its addressable market and creating an additional long-term growth opportunity. Softcat posts double-digit profit growth and moves into U.S. market with GDT deal
• Positive Sentiment: Directors agreed to subscribe for 12,432 new ordinary shares. Although the issue is small, insider participation can signal management alignment with shareholders. Softcat Directors Subscribe to New Equity
• Neutral Sentiment: Jefferies reaffirmed its “hold” rating and set a GBX 1,700 target, suggesting limited near-term upside at the prevailing valuation.
• Positive Sentiment: One stock analysis estimates approximately 25% potential upside, based on Softcat’s position in the IT-reseller sector and its growth prospects. Softcat Stock Analysis and Potential Upside
• Negative Sentiment: Management’s fiscal 2027 guidance implies a deceleration from the exceptionally strong fiscal 2026 performance. That slower-growth outlook overshadowed the earnings beat and dividend increase, driving the negative share-price reaction. Softcat shares fall as outlook points to slower growth
• Negative Sentiment: The new share issuance increases the share count to approximately 215.7 million, creating modest dilution for existing investors, although the number of shares issued is small.

Analyst Upgrades and Downgrades

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

Softcat Stock Performance

The stock’s 50-day moving average is GBX 1,935.22 and its 200 day moving average is GBX 1,742.66. The stock has a market cap of £3.73 billion, a price-to-earnings ratio of 24.72, a P/E/G ratio of 11.51 and a beta of 0.58. The company has a debt-to-equity ratio of 10.41, a current ratio of 1.39 and a quick ratio of 1.38.

Softcat (LON:SCT) last released its earnings results on Wednesday, October 14th. The company reported GBX 75.80 earnings per share (EPS) for the quarter. Softcat had a return on equity of 46.24% and a net margin of 7.61%. As a group, analysts predict that Softcat plc will post 60.72 earnings per share for the current fiscal year.

Insider Buying and Selling

In other Softcat news, insider Kathryn Mecklenburgh acquired 176 shares of the business’s stock in a transaction on Monday, September 7th. The stock was purchased at an average price of GBX 2,045 per share, for a total transaction of £3,599.20. Also, insider Graham Charlton bought 176 shares of Softcat stock in a transaction on Monday, September 7th. The stock was acquired at an average cost of GBX 2,045 per share, with a total value of £3,599.20. Over the last 90 days, insiders purchased 384 shares of company stock worth $749,739. Company insiders own 2.91% of the company’s stock.

About Softcat

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.