Why ScanSource Stock Is Soaring Today
Key Points
ScanSource posted big sales and earnings beats in fiscal Q4.
The company also issued encouraging guidance for fiscal 2027.
ScanSource is set to buy MicroAge in a $220.5 million deal that's on track to close by Sept. 30.
- 10 stocks we like better than ScanSource ›
ScanSource (NASDAQ: SCSC) is seeing strong bullish momentum in Thursday's trading following the company's recent quarterly report. The cloud connectivity specialist's share price was up 16.2% as of 11:15 a.m. ET -- and the stock had been up as much as 28.4% closer to the opening of the market.
Before trading started this morning, ScanSource published results for the fourth quarter of its 2026 fiscal year -- a period that ended June 30. In addition to posting sales and earnings that exceeded Wall Street's targets, the company also announced a major acquisition move.
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ScanSource delivered big beats in fiscal Q4
ScanSource's fiscal Q4 report arrived with sales and earnings results that came in far ahead of the average Wall Street analyst forecasts. Revenue rose roughly 17% year over year to reach $953.1 million, surpassing the average analyst estimate by roughly $151 million. Meanwhile, non-GAAP (adjusted) earnings per share of $1.46 surpassed the average target by $0.32 per share.
In conjunction with its fiscal Q4 report, ScanSource also announced that it had entered into a deal to acquire tech and digital transformation specialist MicroAge in a $220.5 million deal. The acquisition is expected to close by the end of September, and ScanSource expects that the deal will be accretive to sales, margins, adjusted earnings, and free cash flow within the first year of integration.
What's next for ScanSource?
Along with big sales and earnings beats in fiscal Q4, the company also issued encouraging forward guidance. Management expects the company's business to post sales growth between 6% and 10% in fiscal 2027 without accounting for contributions from MicroAge, and it's also guiding for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) between $158 million and $165 million and adjusted free cash flow (FCF) of at least $85 million.
While FCF looks poised to decline substantially from $113.8 million in the last fiscal year, the company's midpoint sales guidance calls for a sales growth acceleration over the 6.1% revenue increase recorded in fiscal 2026. Adjusted EBITDA is also projected to see a meaningful jump of roughly 6.6% at the midpoint of the guidance range. Between its fiscal Q4 results, forward guidance, and the pending integration of MicroAge, ScanSource's outlook has gotten a substantial boost with its latest quarterly update.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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