Softcat’s share price soars as forecasts are upgraded!
Are you on the lookout for UK growth stocks?If so, get this FREE no-strings report now.While it’s available: you’ll discover what we think is a top growth stock for the decade ahead.And the performance of this company really is stunning.In 2019, it returned £150million to shareholders through buybacks and dividends.We believe its financial position is about as solid as anything we’ve seen.Since 2016, annual revenues increased 31%In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259Operating cash flow is up 47%. (Even its operating margins are rising every year!)Quite simply, we believe it’s a fantastic Foolish growth pick.What’s more, it deserves your attention today.So please don’t wait another moment. Our 6 ‘Best Buys Now’ Shares Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Softcat. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. FREE REPORT: Why this £5 stock could be set to surge Softcat’s share price soars as forecasts are upgraded! The FTSE 250 is rising towards new record highs in Wednesday trading. Britain’s second-tier UK share index is almost 1% higher on the day and just 150 points off recent all-time highs around 22,775 points. The Softcat (LSE: SCT) share price is one of the index’s strongest risers too in mid-week business.At £19.10 per share, the Softcat share price is up 6% from Tuesday’s close. The FTSE 250 tech share is also a whisker off its own record close of £19.69 set earlier this month. This is thanks to a positive reception to the company’s latest financials.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Softcat to beat expectationsIn a trading update for its third quarter Softcat said that it “continued to trade well” following an “exceptional” first half of the financial year ending in July.The IT giant “delivered further double-digit year-on-year growth in revenue, gross profit and operating profit,” it said, adding that this reflected “[a] performance that was generally more broad-based than that seen in the first half.”Softcat saw run-rate transaction volumes strengthen during the third quarter. Meanwhile cash collections and conversion had remained “good” in the three-month period.As a consequence the FTSE 250 firm expects results for the full financial year to beat expectations.A bright outlookLooking beyond the current year, Softcat said that “cost savings related to Covid are expected to reverse” in fiscal 2022. It said that customer visits and attending internal events will again become possible as pandemic-related lockdowns are rolled back.Softcat also noted that it had enjoyed some of the biggest deals in its history during the first half of financial 2021. And “significant elements” of these “were one-off in nature.” These business wins, allied with those cost savings, were expected to contribute £12m to this year’s results.The IT firm therefore expects earnings before interest and tax (EBIT) in financial 2022 to be “broadly in line” with that reported in the current period following today’s announced upgrades. It added too that “we remain confident of the road ahead and expect to see further growth” beyond next year.Why I’d buy this UK shareIt’s clear that Softcat will find it difficult to replicate this year’s exceptional results. Covid-19 lockdowns and the subsequent spike in homeworking helped sales to explode across many UK tech stocks since March 2020.But I’m confident that Softcat will enjoy still strong and sustained revenues and profits growth beyond the short term. Companies across the globe are switching to more flexible working models following the public health crisis. This provides firms like Softcat — a rising star in the field of IT infrastructure — with plenty of business to win in the future.I’m aware, though, that this UK share trades on a forward price-to-earnings (P/E) ratio of 42 times. Elevated valuations like that can lead to sharp share price corrections if news flow surrounding the firm starts to disappoint. Enter Your Email Address Simply click below to discover how you can take advantage of this. See all posts by Royston Wild I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Image source: Getty Images. Royston Wild | Wednesday, 26th May, 2021 | More on: SCT Get the full details on this £5 stock now – while your report is free.