Endava (DAVA) AI Stock Analysis

• Market Cap: $588.54M
• Dividend Yield: N/A
• Average Volume (3M): 760.04K
• Price to Earnings (P/E): 25.6
• Beta (1Y): 1.27
• Revenue Growth: 7.13%
• EPS Growth: 23.63%
• Country: US
• Employees: 11,668
• Sector: Technology
• Sector Strength: 83
• Industry: Software - Infrastructure
• EPS (TTM): 0.32
• Shares Outstanding: 44,662,434
• 10 Day Avg. Volume: 823,686
• 30 Day Avg. Volume: 760,041
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.86
• Enterprise Value/Revenue: 1.40
• Enterprise Value/Gross Profit: 5.73
• Enterprise Value/Ebitda: 13.89
• 1Y Price Target: $13.50
• Price Target Upside: 32.61% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 64 Neutral
• Price Target: $16.00 ▲(57.17% Upside)

Endava receives a moderate overall score, driven by solid financial stability and strategic partnerships that offer growth potential. However, the technical indicators suggest bearish momentum, and economic headwinds are impacting short-term growth prospects. The company's high P/E ratio reflects optimistic growth expectations, balanced by challenges in maintaining profitability margins.

Positive Factors

Business Growth

Management expressed optimism for the second half of 2026, expecting growth in North America and modest upticks in its healthcare and BCM segments as recently won deals ramp up.

Operational Improvements

Endava Flow, the company’s AI-native delivery model, shows clear gains in speed, quality, and cost, driving up to 10x productivity gains due to faster change delivery.

Revenue Performance

Banking and capital markets, which account for 21.5% of revenue, grew 65% year-over-year last quarter and continues to see strong traction with large opportunities.

Negative Factors

Financial Guidance

Endava provided first-quarter and full-year fiscal 2026 guidance that was below consensus, pressuring shares.

Growth Challenges

DAVA's reduced outlook and the inability to identify meaningful short-term growth drivers contribute to skepticism about its recovery.

Market Confidence

Despite the highest-ever quarterly order book, client caution around spending and timing of spending is weighing on revenue growth and the outlook.

Endava Business Overview & Revenue Model

Company Description

Endava plc provides technology services for clients in the consumer products, healthcare, mobility, and retail verticals in Europe, Latin America, North America, and internationally. The company offers technology and digital advisory services for payments and financial services, and TMT sectors; IT strategies; business analysis services; program management services; digital product strategy services; and architecture, extended reality, machine learning and artificial intelligence, product design, and user experience and visual design services. It also engages in the identifying, defining, and embedding collaborative data and analytics; and provision of automated testing, cloud native software engineering, continuous delivery, distributed agile delivery, intelligent automation, secure development, agile applications management, cloud infrastructure, DevSecOps, service delivery, smart desk, and telemetry and monitoring services. The company was founded in 2000 and is headquartered in London, the United Kingdom.

How the Company Makes Money

Endava makes money through a diversified revenue model primarily driven by providing technology and consulting services. Key revenue streams include digital strategy consulting, software development, and IT services which are tailored to meet the needs of various industries. The company capitalizes on long-term partnerships with clients, which often leads to repeat business and sustained revenue. Additionally, Endava's focus on delivering high-quality services through nearshore and offshore delivery centers contributes to cost efficiency and competitive pricing, further enhancing its earning potential.

Endava Financial Statement Overview

Summary

Endava demonstrates solid financial health with strong equity and cash flow positions. While revenue growth is steady, operational efficiency has decreased, impacting profitability margins. The balance sheet is strong, with low leverage and high equity, offering stability. However, the company faces challenges in maintaining profit margins and ROE, which could impact future growth.

Income Statement

Endava's TTM (Trailing-Twelve-Months) revenue growth is moderate with a 5.28% increase compared to the previous annual period. The gross profit margin for the TTM is 24.42%, indicating effective cost management. However, the net profit margin is relatively low at 2.33%, and there is a decline in EBIT and EBITDA margins compared to past years, signaling reduced operational efficiency.

Balance Sheet

The company maintains a strong equity position with an equity ratio of 67.14% as of the latest TTM. The debt-to-equity ratio stands at 0.29, indicating low leverage and financial stability. However, the return on equity has declined, reflecting reduced profitability relative to equity.

Cash Flow

Endava's cash flow statements show a robust free cash flow generation with a slight growth rate of 2.48%, supporting its operational requirements. The operating cash flow to net income ratio is strong at 3.02, indicating high cash generation relative to net income. However, the free cash flow to net income ratio is 2.76, which suggests a slight decline in conversion efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	779.90M	740.76M	794.73M	654.76M	446.30M	350.95M
Gross Profit	190.44M	179.71M	264.08M	217.93M	153.83M	100.15M
EBITDA	78.62M	72.19M	142.38M	113.56M	81.27M	29.16M
Net Income	18.19M	17.12M	94.16M	83.09M	43.45M	19.99M
Balance Sheet
Total Assets	961.77M	1.01B	770.12M	621.86M	473.21M	360.94M
Cash, Cash Equivalents and Short-Term Investments	68.40M	62.54M	164.76M	163.20M	70.45M	101.91M
Total Debt	185.60M	202.76M	69.01M	55.90M	63.69M	53.37M
Total Liabilities	316.18M	374.44M	198.81M	189.13M	172.54M	124.62M
Stockholders Equity	645.59M	639.46M	571.31M	432.72M	300.67M	236.33M
Cash Flow
Free Cash Flow	50.12M	48.91M	110.84M	106.75M	82.24M	30.36M
Operating Cash Flow	54.84M	54.39M	124.52M	120.72M	88.35M	40.24M
Investing Cash Flow	-274.74M	-290.32M	-110.85M	-23.88M	-107.09M	-29.75M
Financing Cash Flow	99.33M	135.06M	-11.00M	-5.08M	-11.92M	20.88M

Endava Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 10.18
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DAVA, the sentiment is Negative. The current price of 10.18 is below the 20-day moving average (MA) of 13.13, below the 50-day MA of 13.64, and below the 200-day MA of 21.27, indicating a bearish trend. The MACD of -0.34 indicates Positive momentum. The RSI at 30.79 is Neutral, neither overbought nor oversold. The STOCH value of 28.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DAVA.

Endava Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ATEN	76 Outperform	$1.29B	26.04	24.39%	1.36%	11.04%	18.70%
VRNT	72 Outperform	$1.23B	30.89	4.72%	―	-2.32%	7.70%
NTCT	69 Neutral	$1.80B	25.03	4.88%	―	5.29%	―
CINT	67 Neutral	$685.03M	21.16	11.27%	―	5.76%	28.93%
RDWR	66 Neutral	$1.06B	77.82	4.46%	―	11.51%	―
DAVA	64 Neutral	$588.54M	25.55	3.37%	―	7.13%	23.63%
Sector *	61 Neutral	$35.52B	8.84	-11.06%	1.87%	8.55%	-8.14%