- Computacenter noted a big progress made in recent weeks due to a surge in the demand for IT products
- The company secured “some substantial technology sourcing contracts”
- Stock price exploded 13% as the buyers are fighting to close above the £15.00 handle
Shares of Computacenter (LON: CCC) skyrocketed today after the company said that it managed to secure some substantial technology sourcing contracts as the IT business continues to boom during the work-from-home regime.
Fundamental analysis: The firm secures big contracts
Computacenter, the UK-based provider of IT services, said that it has managed to further grow its business on a surge in demand for its services amid the work-from-home setup.
“We stated in our trading statement on 23rd April 2020 that current trading was more robust than we had anticipated at the start of the crisis. Since that date business has accelerated further and we have managed to secure some substantial technology sourcing contracts due to our ability to scale our operations to meet the demand,” the company said in a trading update.
However, the company is still not ready to commit to provide a “meaningful guidance” for the second half of the year.
“While things are a little clearer, continuing uncertainty in the market is such that the Board believes that it is still unable to provide meaningful guidance at this time concerning the second half of the year due to the COVID-19 crisis”.
In April, the IT company said its profitability remained in-line with the previous year, despite the COVID-19 outbreak that created havoc across all industries.
“We are confident in the short-term outlook and the Board believes that the pre-tax profit performance in the first half of 2020 will be broadly in-line with, or slightly ahead of, that of the first half of 2019. The second half of the year is more difficult to predict but currently our full year expectations remain unchanged,” the firm said in a statement.
Technical analysis: Stock price explodes
Following the release of the trading update early this morning, shares of Computacenter skyrocketed to trade more than 12% higher on the day. The buyers are now fighting to force a close above the 200-DMA at £14.93, which should set up a base for the potential extension higher next week.
Computacenter stock hit record highs days before the COVID-19 spread to the UK, causing the price to lose more than 50% of the value in just a few weeks.
A close above £14.93 should open the door for another leg higher, which is likely to target the next important resistance near the £16.00 handle.
Computacenter stock price is up nearly 13% on the day after the company released a trading statement to note big progress on the back of a surge in the demand for the work-from-home IT-related services.