Image source: Getty Images
Earlier this week, I suggested that FTSE 250 share Softcat (LSE:SCT) could be about to lift off again. The reason? A fresh trading statement that could wow investors once more.
Softcat had beaten profit forecasts twice already in 2026, sending its share price through the roof. I was expecting the tech star to seal a hat-trick and beat City estimates again today (14 October). I was right.
The problem is the FTSE 250 company also warned of slower growth from this point on. Its shares tumbled 6% on the news, to £18.09 each.
This hasn’t just delivered a knock to my pride. As a holder of Softcat shares myself, I’m pondering whether I should trim back or sell some of my holdings. So what happens next?
What’s the story?
Softcat provides a wide range of IT services to British businesses. It’s a leading light in areas including networking, workspaces, cloud computing and cybersecurity. This expertise is helping it generate strong sales and profits even in tough times as it increases market share.
Sales leapt 35.4% in the 12 months to July, hitting £2bn, it announced today, while gross invoiced income rose 30.5% to £4.7bn. Underlying operating profit increased 19.7% year on year to £215m.
Softcat said that gross invoiced income — its preferred method of gauging underlying sales — was boosted by “very strong, broad-based performance together with the contribution from larger solutions projects.”
But here’s the thing. It isn’t immune to outside pressures, and problems like memory chip shortages and a tougher environment for large projects mean earnings are tipped to slow this financial year.
“High single-digit underlying operating profit growth” is currently expected, down from the near-20% rise last year.
Looking long term
Predicting near-term share price movements is a tricky business, as my wrong call on the shares today shows. Though full-year results beat estimates, other news meant the tech giant dropped sharply.
Yet one disappointing update hasn’t shaken my faith in Softcat. I buy stocks to hold for the long haul. And over this sort of timeframe, the FTSE 250 company has a great record of delivering stunning returns. Since its stock market listing in 2015, the share price is up a whopping 543%.
That represents an average annual return of 19.1%, significantly better than the broader FTSE 250’s 6.2%. And I’m expecting the tech star to keep outperforming.
A top growth opportunity?
Analysts at eToro say:
Businesses are spending heavily to modernise increasingly complex IT systems, and Softcat is benefiting from the growing need for trusted advice, infrastructure and security.
The company therefore retains enormous growth potential as firms digitalise their operations. But that’s not the only thing that has me excited. Softcat’s cash-rich balance sheet is allowing it to make acquisitions (like September’s £785m takeover of US company GDT) to rapidly expand in lucrative overseas markets.
Encouragingly, the company commented today that “business momentum remains strong“. Problems like memory chip shortages and challenging economic conditions may impact this momentum. Yet I’m optimistic Softcat’s share price will recover strongly from today’s setback. We could even see more of the sort of powerful forecasts the market has become used to so I see it as worth a closer look.
If you’re looking for top growth shares, I’d also encourage you to consider the stock discussed in the free wealth report below.
What growth stock do we like better than Softcat Plc right now?
One of our Share Advisor analysts has just released a brand new stock report that we think is a must-read for any investor looking to try and generate potential growth.
And the best bit is that you can see if for yourself, right now, absolutely free of charge!
No jargon. No hard sell. Just a clear look at a growth share idea we think is worth your time.
Royston Wild owns shares in Softcat.
Image source: Getty Images
Earlier this week, I suggested that FTSE 250 share Softcat (LSE:SCT) could be about to lift off again. The reason? A fresh trading statement that could wow investors once more.
Softcat had beaten profit forecasts twice already in 2026, sending its share price through the roof. I was expecting the tech star to seal a hat-trick and beat City estimates again today (14 October). I was right.
The problem is the FTSE 250 company also warned of slower growth from this point on. Its shares tumbled 6% on the news, to £18.09 each.
This hasn’t just delivered a knock to my pride. As a holder of Softcat shares myself, I’m pondering whether I should trim back or sell some of my holdings. So what happens next?
What’s the story?
Softcat provides a wide range of IT services to British businesses. It’s a leading light in areas including networking, workspaces, cloud computing and cybersecurity. This expertise is helping it generate strong sales and profits even in tough times as it increases market share.
Sales leapt 35.4% in the 12 months to July, hitting £2bn, it announced today, while gross invoiced income rose 30.5% to £4.7bn. Underlying operating profit increased 19.7% year on year to £215m.
Softcat said that gross invoiced income — its preferred method of gauging underlying sales — was boosted by “very strong, broad-based performance together with the contribution from larger solutions projects.”
But here’s the thing. It isn’t immune to outside pressures, and problems like memory chip shortages and a tougher environment for large projects mean earnings are tipped to slow this financial year.
“High single-digit underlying operating profit growth” is currently expected, down from the near-20% rise last year.
Looking long term
Predicting near-term share price movements is a tricky business, as my wrong call on the shares today shows. Though full-year results beat estimates, other news meant the tech giant dropped sharply.
Yet one disappointing update hasn’t shaken my faith in Softcat. I buy stocks to hold for the long haul. And over this sort of timeframe, the FTSE 250 company has a great record of delivering stunning returns. Since its stock market listing in 2015, the share price is up a whopping 543%.
That represents an average annual return of 19.1%, significantly better than the broader FTSE 250’s 6.2%. And I’m expecting the tech star to keep outperforming.
A top growth opportunity?
Analysts at eToro say:
Businesses are spending heavily to modernise increasingly complex IT systems, and Softcat is benefiting from the growing need for trusted advice, infrastructure and security.
The company therefore retains enormous growth potential as firms digitalise their operations. But that’s not the only thing that has me excited. Softcat’s cash-rich balance sheet is allowing it to make acquisitions (like September’s £785m takeover of US company GDT) to rapidly expand in lucrative overseas markets.
Encouragingly, the company commented today that “business momentum remains strong“. Problems like memory chip shortages and challenging economic conditions may impact this momentum. Yet I’m optimistic Softcat’s share price will recover strongly from today’s setback. We could even see more of the sort of powerful forecasts the market has become used to so I see it as worth a closer look.
If you’re looking for top growth shares, I’d also encourage you to consider the stock discussed in the free wealth report below.
What growth stock do we like better than Softcat Plc right now?
One of our Share Advisor analysts has just released a brand new stock report that we think is a must-read for any investor looking to try and generate potential growth.
And the best bit is that you can see if for yourself, right now, absolutely free of charge!
No jargon. No hard sell. Just a clear look at a growth share idea we think is worth your time.
Royston Wild owns shares in Softcat.
