Bryan Bergin, an analyst from TD Cowen, maintained the Buy rating on Endava (DAVA – Research Report). The associated price target is $36.00.
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Bryan Bergin has given his Buy rating due to a combination of factors that reflect both challenges and opportunities for Endava. Despite the mixed second-quarter results and a reduced FY25 growth outlook, the company’s valuation remains attractive. The demand recovery for discretionary IT services is uneven, with weaknesses in the UK and Australia, but the US market provides a notable positive offset. Endava’s earnings per share are protected through cost levers and a share repurchase program, which adds to its financial resilience.
Furthermore, while scaling remains a challenge amid an uneven demand environment, the company maintains optimism due to a significant pipeline of large deals and core modernization initiatives, including components of GenAI. The US market, which accounts for a substantial portion of revenue, shows strength, particularly in the healthcare sector, which is performing well. Although challenges persist, particularly in specific geographies and sectors, the overall outlook suggests potential for improvement, making the stock a buy.
In another report released yesterday, Needham also maintained a Buy rating on the stock with a $38.00 price target.
Based on the recent corporate insider activity of 27 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of DAVA in relation to earlier this year.