The Softcat plc (LON:SCT) Full-Year Results Are Out And Analysts Have Published New Forecasts

Shareholders of Softcat plc (LON:SCT) will be pleased this week, given that the stock price is up 11% to UK£17.16 following its latest full-year results. The result was positive overall - although revenues of UK£963m were in line with what the analysts predicted, Softcat surprised by delivering a statutory profit of UK£0.59 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Softcat

Following the latest results, Softcat's twelve analysts are now forecasting revenues of UK£1.07b in 2025. This would be a decent 11% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 6.5% to UK£0.64. Before this earnings report, the analysts had been forecasting revenues of UK£1.08b and earnings per share (EPS) of UK£0.62 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of UK£16.81, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Softcat analyst has a price target of UK£19.60 per share, while the most pessimistic values it at UK£13.10. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing stands out from these estimates, which is that Softcat is forecast to grow faster in the future than it has in the past, with revenues expected to display 11% annualised growth until the end of 2025. If achieved, this would be a much better result than the 1.9% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 7.9% annually. So it looks like Softcat is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Softcat's earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at UK£16.81, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Softcat going out to 2027, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 1 warning sign for Softcat you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.