Endava: Balancing Challenges with Growth Opportunities Amid Fiscal Fluctuations

William Blair analyst Maggie Nolan has maintained their bullish stance on DAVA stock, giving a Buy rating yesterday.

Maggie Nolan’s rating is based on a combination of factors that reflect both challenges and opportunities for Endava. Despite the company’s fiscal third-quarter results missing revenue expectations, they managed to exceed EPS estimates due to efficient cost management and higher-than-expected gross margins. This indicates a strong internal financial discipline that could benefit the company in the long run.
Moreover, while there was a slowdown in closing large deals, the projects have not been canceled, and there is optimism about future demand recovery. The increase in the pipeline of large deals, particularly in core modernization projects, suggests potential growth opportunities. Although there are headwinds such as FX challenges and cautious client spending, particularly in North America, the company’s stable pricing strategy and the potential for demand recovery contribute to the Buy rating.

In another report released yesterday, Guggenheim also maintained a Buy rating on the stock with a $28.00 price target.