Need To Know: Analysts Are Much More Bullish On Softcat plc (LON:SCT) Revenues

Celebrations may be in order for Softcat plc (LON:SCT) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline.

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Following the upgrade, the current consensus from Softcat's twelve analysts is for revenues of UK£2.3b in 2027 which - if met - would reflect a solid 15% increase on its sales over the past 12 months. Statutory earnings per share are presumed to climb 13% to UK£0.79. Previously, the analysts had been modelling revenues of UK£2.1b and earnings per share (EPS) of UK£0.78 in 2027. It seems analyst sentiment has certainly become more bullish on revenues, even though they haven't changed their view on earnings per share.

View our latest analysis for Softcat

Even though revenue forecasts increased, there was no change to the consensus price target of UK£21.30, suggesting the analysts are focused on earnings as the driver of value creation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 15% growth on an annualised basis. That is in line with its 17% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 12% per year. So although Softcat is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Softcat.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Softcat analysts - going out to 2029, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.