Endava (DAVA) AI Stock Analysis

• Market Cap: $459.61M
• Dividend Yield: N/A
• Average Volume (3M): 1.22M
• Price to Earnings (P/E): 18.5
• Beta (1Y): 1.43
• Revenue Growth: 7.13%
• EPS Growth: 23.63%
• Country: US
• Employees: 11,668
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 0.32
• Shares Outstanding: 40,782,810
• 10 Day Avg. Volume: 912,689
• 30 Day Avg. Volume: 1,220,540
• PEG Ratio: 1.27
• Price to Book (P/B): 1.12
• Price to Sales (P/S): 0.84
• P/FCF Ratio: 13.57
• Enterprise Value/Market Cap: 2.38
• Enterprise Value/Revenue: 1.41
• Enterprise Value/Gross Profit: 5.64
• Enterprise Value/Ebitda: 13.69
• 1Y Price Target: $12.43
• Price Target Upside: 46.93% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

• Rating: 51 Neutral
• Price Target: $10.00 ▲(18.20% Upside)

Endava's overall stock score reflects significant challenges in financial performance, with declining revenue growth and profitability margins. Technical analysis indicates bearish momentum, further weighing on the score. Valuation is reasonable, but the absence of a dividend yield is a drawback. The earnings call highlighted both strategic advancements and financial pressures, contributing to a cautious outlook. The company's focus on AI and strategic partnerships are positive, but immediate financial challenges need addressing.

Positive Factors

AI Integration

Endava's significant progress in AI integration positions the company as a leader in digital transformation, enhancing its service offerings and competitiveness.

Strategic Partnerships

These partnerships enhance Endava's technological capabilities and market reach, supporting long-term growth through innovation and client acquisition.

Record Order Book

A record order book indicates strong client demand and confidence in Endava's services, providing a stable revenue base and growth potential.

Negative Factors

Revenue Decline

The decline in revenue highlights challenges in maintaining growth momentum, potentially impacting profitability and market position.

Increased Borrowings

Rising borrowings may strain financial flexibility and increase risk, affecting Endava's ability to invest in growth opportunities.

Weakness in Europe

A significant decline in European revenue indicates regional market challenges, potentially affecting overall revenue stability and growth.

Endava Business Overview & Revenue Model

Company Description

Endava (DAVA) is a technology services company that specializes in delivering digital transformation solutions, software engineering, and IT consulting services. Headquartered in London, UK, Endava operates in multiple sectors including financial services, insurance, telecommunications, and media. The company focuses on helping clients enhance their business performance through agile methodologies, innovation, and technology expertise, providing services such as application development, cloud services, and automation solutions.

How the Company Makes Money

Endava generates revenue primarily through its consulting and technology services. The company operates on a project-based revenue model, where it earns fees by delivering bespoke software development and IT consulting solutions tailored to the specific needs of its clients. Key revenue streams include billing for time and materials on projects, fixed-price contracts for specific deliverables, and ongoing managed services agreements. Additionally, Endava has formed partnerships with various technology providers, which may enhance its service offerings and contribute to revenue growth. The company also benefits from a strong client retention rate and recurring revenue from long-term contracts, which provide a stable income base.

Endava Financial Statement Overview

Summary

Endava faces challenges with declining revenue growth and profitability margins, impacting its income statement. The balance sheet remains relatively stable with moderate leverage, but the increase in debt-to-equity ratio is a concern. Cash flow generation has weakened, although the company still maintains a strong free cash flow to net income ratio. Overall, while the company has a solid financial foundation, it needs to address declining growth and profitability to improve its financial health.

Income Statement

Endava's income statement reveals a declining trend in revenue growth, with a significant drop in revenue in the latest year. Profit margins have also decreased, with gross profit margin falling from 33.2% in 2023 to 25.1% in 2025. The net profit margin has similarly declined, indicating pressure on profitability. Despite these challenges, the company maintains positive EBIT and EBITDA margins, though they have decreased over the years.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio, which has increased over the years, indicating rising leverage. However, the company maintains a healthy equity ratio, suggesting a stable financial position. Return on equity has decreased, reflecting lower profitability, but the company still retains a solid equity base relative to its assets.

Cash Flow

Cash flow analysis indicates a decline in free cash flow growth, with negative growth in the latest year. The operating cash flow to net income ratio has decreased, suggesting reduced cash generation efficiency. However, the free cash flow to net income ratio remains strong, indicating that the company is still generating cash relative to its net income.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	772.25M	772.25M	740.76M	794.73M	654.76M	446.30M
Gross Profit	193.70M	193.70M	179.71M	264.08M	217.93M	153.83M
EBITDA	79.75M	79.75M	72.19M	142.38M	113.56M	81.27M
Net Income	21.21M	21.21M	17.12M	94.16M	83.09M	43.45M
Balance Sheet
Total Assets	935.77M	935.77M	1.01B	770.12M	621.86M	473.21M
Cash, Cash Equivalents and Short-Term Investments	59.47M	59.47M	62.54M	164.76M	163.20M	70.45M
Total Debt	228.05M	228.05M	202.76M	69.01M	55.90M	63.69M
Total Liabilities	352.83M	352.83M	374.44M	198.81M	189.13M	172.54M
Stockholders Equity	582.94M	582.94M	639.46M	571.31M	432.72M	300.67M
Cash Flow
Free Cash Flow	48.07M	48.07M	48.91M	110.84M	106.75M	82.24M
Operating Cash Flow	52.77M	52.77M	54.39M	124.52M	120.72M	88.35M
Investing Cash Flow	-9.94M	-9.94M	-290.32M	-110.85M	-23.88M	-107.09M
Financing Cash Flow	-45.13M	-45.13M	135.06M	-11.00M	-5.08M	-11.92M

Endava Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 8.46
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 8.46 is below the 20-day moving average (MA) of 8.91, below the 50-day MA of 10.75, and below the 200-day MA of 18.26, indicating a bearish trend. The MACD of -0.59 indicates Negative momentum. The RSI at 33.57 is Neutral, neither overbought nor oversold. The STOCH value of 29.49 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
CINT	65 Neutral	$559.76M	17.09	11.27%	―	5.76%	28.93%
CCSI	62 Neutral	$479.36M	6.09	-94.58%	―	-1.23%	-11.22%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
BAND	61 Neutral	$459.35M	―	-2.90%	―	14.51%	58.41%
JG	59 Neutral	$49.23M	―	-9.11%	―	18.99%	77.96%
YEXT	54 Neutral	$1.02B	―	4.72%	―	13.51%	―
DAVA	51 Neutral	$459.61M	18.48	3.37%	―	7.13%	23.63%

Endava Corporate Events

Endava PLC Releases 2025 Statutory Accounts

Endava PLC announced that its statutory accounts for the year ended June 30, 2025, were approved by the board of directors on September 9, 2025, and delivered to the Registrar of Companies on September 10, 2025. These accounts, prepared in accordance with UK-adopted International Accounting Standards and IFRS, are now available on the company’s website, reflecting Endava’s commitment to transparency and regulatory compliance.

Endava Reports Mixed Financial Results for FY2025 Amid AI Focus

On September 4, 2025, Endava plc announced its financial results for the fourth quarter and fiscal year ending June 30, 2025. The company reported a 3.9% year-on-year revenue decrease for Q4 FY2025, while FY2025 saw a 4.3% revenue increase. Despite a challenging operating environment, Endava achieved its highest quarterly order book and a record full-year signed value. The company remains cautious due to clients recalibrating spending, impacting short-term operations. Endava’s strategic focus on AI is evident, with over half of its workforce now utilizing AI in projects, marking significant progress toward becoming AI-native.