Brief Commentary On Softcat plc’s (LON:SCT) Fundamentals

I’ve been keeping an eye on Softcat plc (LON:SCT) because I’m attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe SCT has a lot to offer. Basically, it is a company with great financial health as well as a a strong history of performance. Below, I’ve touched on some key aspects you should know on a high level. For those interested in digger a bit deeper into my commentary, read the full report on Softcat here.

Outstanding track record with flawless balance sheet

SCT delivered a bottom-line expansion of 37% in the prior year, with its most recent earnings level surpassing its average level over the last five years. The strong earnings growth is reflected in impressive double-digit 55% return to shareholders, which is an notable feat for the company. SCT is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that SCT has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. Investors should not worry about SCT’s debt levels because the company has none! It has only utilized funding from its equity capital to run the business, which is typically normal for a small-cap company. Investors’ risk associated with debt is virtually non-existent and the company has plenty of headroom to grow debt in the future, should the need arise.

LSE:SCT Income Statement Export December 12th 18

Next Steps:

For Softcat, there are three relevant factors you should look at:

1. Future Outlook: What are well-informed industry analysts predicting for SCT’s future growth? Take a look at our free research report of analyst consensus for SCT’s outlook.

2. Valuation: What is SCT worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether SCT is currently mispriced by the market.

3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of SCT? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.