Softcat (LON:SCT) Announces Quarterly Earnings Results

Softcat (LON:SCT) posted its quarterly earnings results on Wednesday. The company reported GBX 75.80 earnings per share (EPS) for the quarter, Digital Look Earnings reports. Softcat had a net margin of 8.06% and a return on equity of 45.16%.

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 Down 10.4%

SCT stock traded down GBX 200 during trading on Wednesday, hitting GBX 1,724. The company had a trading volume of 1,597,716 shares, compared to its average volume of 1,786,267. The stock has a market cap of £3.71 billion, a price-to-earnings ratio of 24.59, a PEG ratio of 11.51 and a beta of 0.58. The company has a quick ratio of 1.38, a current ratio of 1.25 and a debt-to-equity ratio of 13.07. The firm has a 50-day moving average price of GBX 1,943.73 and a 200-day moving average price of GBX 1,734.73. Softcat has a 12 month low of GBX 1,083 and a 12 month high of GBX 2,134.

Trending Headlines about Softcat

Here are the key news stories impacting Softcat this week:

• Positive Sentiment: Fiscal 2026 revenue increased 35.4% and profit rose 19.4%, indicating continued strong demand for IT products and services. Softcat FY2026 profits rise 19.4% as revenue grows 35.4%
• Positive Sentiment: Softcat raised its dividend after profit growth exceeded expectations, supporting the investment case and signaling management confidence in cash generation. Softcat lifts dividend as profit growth beats expectations
• Positive Sentiment: The company reported quarterly earnings of GBX 75.80 per share, with an 8.06% net margin and 45.16% return on equity. Softcat is also expanding in the United States through a deal with GDT, potentially creating a new avenue for growth. Softcat posts double-digit profit growth and moves into U.S. market with GDT deal
• Neutral Sentiment: Jefferies reaffirmed its “hold” rating and set a GBX 1,700 price target, suggesting limited near-term upside at the time of its assessment. Softcat fiscal 2026 results
• Negative Sentiment: Fiscal 2027 guidance points to slower growth, prompting investors to discount the strong results and focus on the possibility that Softcat’s rapid expansion is moderating. Softcat shares fall as outlook points to slower growth
• Negative Sentiment: The market reaction reflects expectations that near-term growth may not justify Softcat’s valuation, even though underlying IT demand and fiscal 2026 results remain strong. Softcat shares slip after strong results as fiscal 2027 growth guidance slows

Insider Buying and Selling at Softcat

In other Softcat news, insider Graham Charlton purchased 176 shares of the company’s stock in a transaction that occurred 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. Also, insider Kathryn Mecklenburgh acquired 176 shares of the business’s stock in a transaction that occurred on Monday, September 7th. The stock was acquired at an average price of GBX 2,045 per share, for a total transaction of £3,599.20. Insiders have bought 384 shares of company stock worth $749,739 in the last ninety days. 2.91% of the stock is currently owned by insiders.

Analysts Set New Price Targets

SCT has been the subject of a number of recent research reports. Berenberg Bank increased their target price on Softcat from GBX 1,950 to GBX 2,400 and gave the stock a “buy” rating in a report on Monday, September 21st. Jefferies Financial Group reiterated a “hold” rating and set a GBX 1,700 price objective on shares of Softcat in a research note on Wednesday. Deutsche Bank Aktiengesellschaft cut Softcat to a “hold” rating and lifted their price objective for the company from GBX 1,800 to GBX 2,140 in a report on Wednesday, August 26th. Finally, JPMorgan Chase & Co. upped their target price on shares of Softcat from GBX 1,950 to GBX 2,300 and gave the stock an “overweight” rating in a report on Monday, September 7th. Four research 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. Based on data from MarketBeat.com, Softcat 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.