Softcat's FY24 gross and operating profits were marginally ahead of consensus expectations, while hardware sales showed early signs of improvement.

The company also provided its FY25 outlook for the first time, guiding for double-digit growth in gross profit and high single-digit growth in operating profit.

"Softcat is one of the highest-quality names in the value-added reseller space and is well placed to continue taking market share. However, at 26.4x P/E and a 3.1% FCF yield, relative to our forecast of a 9% FY24/26 EPS CAGR, in our view the equity looks fully valued on a one-year basis," said the German bank.

Berenberg added that while FY25 guidance was not reliant on a significant uptick in hardware spend, chief executive Graham Charlton had noted that the company was seeing "very early signs of a device refresh cycle".

"As such, we have increased our FY25 and FY26 gross profit estimates by 0.7% and 1.1% respectively, and increased our reported operating profit estimates by 0.7% and 0.8% respectively."

Reporting by Iain Gilbert at Sharecast.com