Endava Ltd (DAVA)
NYSE:DAVA
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Endava
(NYSE:DAVA)
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Rating:50Neutral
Price Target:
$4.50
▲(3.45% Upside)
Action:ReiteratedDate:02/21/26
The score is primarily held back by deteriorating financial performance (revenue decline, net loss, and sharp margin compression) and clearly bearish technical signals (below key moving averages with negative MACD). Earnings call commentary adds modest support via sequential recovery expectations, strong near-term coverage, and AI traction, but valuation lacks dividend support and the P/E is not compelling relative to the weakened profitability.
Positive Factors
Diversified Service Model
Endava's end-to-end services (digital strategy, software engineering, cloud/data, QA, managed services) across multiple industries and a distributed nearshore/offshore delivery model create durable demand capture. This diversification and scalable delivery mix supports recurring contract revenue and margin leverage as clients modernize systems over time.
Negative Factors
Revenue Decline
Sustained YoY revenue declines and management guidance for continued FY revenue contraction indicate structural demand weakness in key verticals. Reduced top-line scale erodes operating leverage, limits reinvestment capacity, and can slow client expansion cycles, making margin recovery and sustained growth harder over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Diversified Service Model
Endava's end-to-end services (digital strategy, software engineering, cloud/data, QA, managed services) across multiple industries and a distributed nearshore/offshore delivery model create durable demand capture. This diversification and scalable delivery mix supports recurring contract revenue and margin leverage as clients modernize systems over time.
Read all positive factors
Endava (DAVA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$244.51M
Dividend YieldN/A
Average Volume (3M)323.39K
Price to Earnings (P/E)―
Beta (1Y)1.33
Revenue Growth4.02%
EPS Growth34.45%
CountryUS
Employees11,668
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.21
Shares Outstanding40,782,810
10 Day Avg. Volume227,738
30 Day Avg. Volume323,394
Financial Highlights & Ratios
PEG Ratio1.27
Price to Book (P/B)1.12
Price to Sales (P/S)0.84
P/FCF Ratio13.57
Enterprise Value/Market Cap1.61
Enterprise Value/Revenue0.53
Enterprise Value/Gross Profit2.27
Enterprise Value/Ebitda6.84
Forecast
1Y Price Target
$8.60Price Target Upside97.70% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)0.82
Revenue Forecast (FY)$739.87M
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 ...
How the Company Makes Money
Endava primarily makes money by selling professional services to business customers under contract, generating revenue mainly from time-and-materials and fixed-price project work for building and modernizing software, and from ongoing managed serv...
Endava Key Performance Indicators (KPIs)
Any
Total Employees
Reflects the company's workforce size, offering insight into operational scale and potential for service delivery and expansion.
Reflects the company's workforce size, offering insight into operational scale and potential for service delivery and expansion.
Data provided by:
The Fly
The FlyEndava Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:May 21, 2026
Earnings Call Sentiment Neutral
The call balanced clear strategic progress—accelerating AI‑native initiatives (Dava Flow, Dava Rise), meaningful partnership wins (OpenAI, hyperscalers), product launches and several client successes—with material near‑term financial deterioration (YoY revenue decline, significant margin compression, a pre‑tax loss, reduced free cash flow and higher borrowings). Management positions these as conscious, margin‑dilutive investments to scale AI capability and capture longer‑term opportunity, while guidance implies modest underlying sequential recovery into Q4; therefore the results reflect meaningful short‑term pain for a stated longer‑term strategic shift.Positive Updates
Revenue and Guidance Outperformance
Quarterly revenue of £184.1M exceeded the upper end of the company's guidance; revenue was down 5.9% year‑over‑year but increased 3.3% sequentially from Q1 FY2026.
Negative Updates
Year‑on‑Year Revenue Decline
Revenue declined 5.9% YoY to £184.1M (constant currency decline of 5.1%), with notable regional weaknesses: Europe down 8.5% (payments and mobility), UK down 9.1% (client reclassification and TMT weakness), North America down 5.1% (FX headwind ~3.3% and no contribution from a large media client).
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue and Guidance Outperformance
Quarterly revenue of £184.1M exceeded the upper end of the company's guidance; revenue was down 5.9% year‑over‑year but increased 3.3% sequentially from Q1 FY2026.
Read all positive updates
Company Guidance
Endava guided Q3 FY2026 revenue of £182–185m (constant‑currency decline of 4.0%–2.5% YoY) with adjusted diluted EPS of 18p–21p, and full‑year FY2026 revenue of £736–750m (constant‑currency decline of 3.5%–1.5% YoY) with adjusted diluted EPS of £0.80–£0.86, using FX rates at 31‑Jan‑2026 (£1 = $1.37; €1.15). For context, Q2 revenue was £184.1m (–5.9% YoY; +3.3% sequential), loss before tax was £7.2m, adjusted PBT was £10.7m (adjusted PBT margin 5.8%), adjusted diluted EPS 16p, adjusted free cash flow £20.1m, cash £68.5m, borrowings £202.7m, capex 4.4% of revenue, and headcount 11,385 (–2.4% YoY); management said AI investments have reduced adjusted PBT margin by ~3% through Q2 and will continue to weigh on margins. Management also cited underlying Q3 QoQ growth of ~4% at the midpoint (with an FX headwind of ~1.5% and a working‑days headwind of ~3%), an expected Q4 underlying sequential pickup of roughly 6% at midpoint, contracted/committed coverage around 95% for Q3 and ~70–75% for Q4, and that ~8.0m ADSs were repurchased for $121.9m with $28.1m remaining under the buyback.Endava Financial Statement Overview
Summary
Income Statement
42
Neutral
Balance Sheet
63
Positive
Cash Flow
58
Neutral
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 741.50M | 772.25M | 740.76M | 794.73M | 654.76M | 446.30M |
| Gross Profit | 173.48M | 198.10M | 188.81M | 264.08M | 217.93M | 154.18M |
| EBITDA | 57.51M | 67.46M | 59.57M | 142.38M | 113.56M | 79.19M |
| Net Income | -2.86M | 21.21M | 17.12M | 94.16M | 83.09M | 43.45M |
Balance Sheet | ||||||
| Total Assets | 926.73M | 935.77M | 1.01B | 770.12M | 621.86M | 473.21M |
| Cash, Cash Equivalents and Short-Term Investments | 68.48M | 59.47M | 62.54M | 164.76M | 163.20M | 70.45M |
| Total Debt | 281.84M | 228.05M | 202.76M | 69.01M | 55.90M | 63.69M |
| Total Liabilities | 362.28M | 352.83M | 374.44M | 198.81M | 189.13M | 172.54M |
| Stockholders Equity | 564.44M | 582.94M | 639.46M | 571.31M | 432.72M | 300.67M |
Cash Flow | ||||||
| Free Cash Flow | 40.56M | 48.07M | 48.91M | 110.84M | 106.75M | 82.24M |
| Operating Cash Flow | 54.72M | 52.77M | 54.39M | 124.52M | 120.72M | 87.67M |
| Investing Cash Flow | -17.05M | -9.94M | -290.32M | -110.85M | -23.88M | -106.41M |
| Financing Cash Flow | -28.65M | -45.13M | 135.06M | -11.00M | -5.08M | -11.92M |
Endava Technical Analysis
Negative
4.35
Price Trends
5.04
Negative
5.82
Negative
8.67
Negative
Market Momentum
-0.19
Negative
37.89
Neutral
53.48
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 4.35 is below the 20-day moving average (MA) of 4.58, below the 50-day MA of 5.04, and below the 200-day MA of 8.67, indicating a bearish trend. The MACD of -0.19 indicates Negative momentum. The RSI at 37.89 is Neutral, neither overbought nor oversold. The STOCH value of 53.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DAVA.
Endava Risk Analysis
Endava disclosed 75 risk factors in its most recent earnings report. Endava reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
If we fail to meet publicly announced guidance, or if we fail to forecast our market opportunity accurately, our operating results could be adversely affected, and the price of our ADSs could decline. Q2, 2023
2.
We use generative AI tools in our operations, which may result in significant operational challenges, liability and reputational harm. Q2, 2023
3.
Our performance and reputation could be adversely affected by increased focus on and demands from customers, investors and regulators with respect to ESG issues and we may be criticized or penalized for the timing, nature or scope of our ESG disclosures as regulatory standards evolve. Q2, 2023
Endava Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $612.23M | 13.29 | 12.49% | ― | 8.33% | 59.54% | |
62 Neutral | $561.83M | ― | -3.39% | ― | 7.42% | 34.42% | |
62 Neutral | $469.84M | 5.07 | -522.60% | ― | -0.44% | -7.23% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
58 Neutral | $450.21M | 23.36 | 24.87% | ― | 9.46% | ― | |
57 Neutral | $40.61M | 22.16 | 0.58% | ― | 20.68% | 84.51% | |
50 Neutral | $244.51M | -9.10 | -0.48% | ― | 4.02% | 34.45% |
* Technology Sector Average
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Endava Corporate Events
Endava Posts Interim Loss as Revenue Declines in First Half of FY2026
Mar 30, 2026
On March 30, 2026, Endava reported unaudited condensed consolidated interim results for the six months ended December 31, 2025, showing revenue of £362.3 million, down from £390.6 million a year earlier. The company swung to a pre-tax lo...
Endava Posts Q2 FY2026 Loss as Revenue Declines Amid Costly AI Pivot and Ongoing Share Buybacks
Feb 19, 2026
Endava on February 19, 2026 reported second-quarter fiscal 2026 results for the three months ended December 31, 2025, showing revenue of £184.1 million, down 5.9% year on year and 5.1% at constant currency, but up 3.3% sequentially from Q1. T...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.