Softcat (LON:SCT) Releases Quarterly Earnings Results

Softcat (LON:SCT) issued 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 return on equity of 45.16% and a net margin of 8.06%.

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 4.9%

SCT traded down GBX 93.59 during midday trading on Wednesday, hitting GBX 1,830.41. 971,330 shares of the company were exchanged, compared to its average volume of 1,783,120. The firm has a market capitalization of £3.94 billion, a P/E ratio of 26.11, a P/E/G ratio of 11.51 and a beta of 0.58. The firm’s 50 day moving average price is GBX 1,943.73 and its 200-day moving average price is GBX 1,734.73. The company has a quick ratio of 1.38, a current ratio of 1.25 and a debt-to-equity ratio of 13.07. Softcat has a 1-year low of GBX 1,083 and a 1-year high of GBX 2,134.

Analysts Set New Price Targets

Several brokerages recently issued reports on SCT. JPMorgan Chase & Co. lifted their price target 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. Deutsche Bank Aktiengesellschaft lowered Softcat to a “hold” rating and boosted their price objective for the stock from GBX 1,800 to GBX 2,140 in a research report on Wednesday, August 26th. Jefferies Financial Group reaffirmed a “hold” rating and issued a GBX 1,700 target price on shares of Softcat in a report on Wednesday. Finally, Berenberg Bank lifted their price target on Softcat from GBX 1,950 to GBX 2,400 and gave the company a “buy” rating in a research note on Monday, September 21st. Four equities 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 company’s stock. Based on data from MarketBeat, the company currently has an average rating of “Hold” and a consensus price target of GBX 1,993.75.

Softcat News Summary

Here are the key news stories impacting Softcat this week:

• Positive Sentiment: Softcat reported a 19.4% increase in fiscal 2026 profit, while revenue rose 35.4%, demonstrating strong demand for IT products and services. Softcat FY2026 profits rise 19.4% as revenue grows 35.4%
• Positive Sentiment: The company increased its dividend after profit growth exceeded expectations, potentially improving shareholder returns and signaling confidence in cash generation. Softcat lifts dividend as profit growth beats expectations
• Positive Sentiment: Softcat is expanding into the U.S. through a deal with GDT, adding a potential growth platform and broadening its geographic reach. Softcat posts double-digit profit growth and moves into U.S. market with GDT deal
• Neutral Sentiment: Softcat reported quarterly earnings per share of GBX 75.80, with a 45.16% return on equity and an 8.06% net margin, underscoring solid profitability. Softcat earnings report
• Negative Sentiment: Fiscal 2027 growth guidance points to a slowdown, overshadowing the strong fiscal 2026 results and likely driving the market’s negative reaction. Softcat shares fall as outlook points to slower growth
• Negative Sentiment: Jefferies reaffirmed its “hold” rating and set a GBX 1,700 price target, below the recent trading level, suggesting limited near-term upside in the broker’s view. Jefferies rating update

Insider Activity at Softcat

In other news, insider Kathryn Mecklenburgh purchased 176 shares of the 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 acquired 176 shares of Softcat stock in a transaction dated Monday, September 7th. The stock was purchased at an average cost of GBX 2,045 per share, for a total transaction of £3,599.20. Insiders purchased 384 shares of company stock worth $749,739 over the last quarter. 2.91% of the stock is currently owned by company insiders.

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.