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Endava Ltd (DAVA)
NYSE:DAVA
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Endava (DAVA) AI Stock Analysis

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DAVA

Endava

(NYSE:DAVA)

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Neutral 51 (OpenAI - 4o)
Rating:51Neutral
Price Target:
$10.00
▲(12.49% 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 (DAVA) vs. SPDR S&P 500 ETF (SPY)

Endava Business Overview & Revenue Model

Company DescriptionEndava 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 MoneyEndava 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 Earnings Call Summary

Earnings Call Date:Sep 04, 2025
(Q4-2025)
|
% Change Since: |
Next Earnings Date:Nov 18, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. While Endava achieved a record order book value and made significant progress in AI integration and strategic partnerships, it faced challenges with revenue decline in Q4 FY 2025, adjusted free cash flow deterioration, and increased borrowings. Additionally, there were pressures in European markets and a cautious outlook for FY 2026.
Q4-2025 Updates
Positive Updates
Record Order Book Value
Endava reported its highest ever order book value signed in Q4 FY 2025, indicating strong customer relationships and the attractiveness of its transformative offerings.
AI Integration Progress
Over half of Endava's workforce is now using AI in projects, showcasing the company's significant progress toward becoming AI native and supporting multiple AI-related engagements.
Strategic Partnerships and Client Acquisitions
Endava's partnership with OpenAI has resulted in client acquisitions and multiple engagements. Additionally, the company has strengthened collaborations with AWS, Microsoft, and Google Cloud.
Revenue Growth in Fiscal Year 2025
Endava's revenue for the fiscal year ended June 30, 2025, was £772.3 million, a 4.3% increase over the prior year, with a constant currency revenue increase of 6.3%.
Adjusted PBT Margin Improvement
The adjusted PBT margin for the three months ended June 30, 2025, was 8.8%, compared to 7.7% in the same period in the prior year.
Negative Updates
Revenue Decline in Q4 FY 2025
Endava's revenue for the three months ended June 30, 2025, was £186.8 million, a 3.9% decrease compared to the same period in the prior year, with a constant currency revenue decrease of 0.7%.
Adjusted Free Cash Flow Deterioration
Endava reported a negative adjusted free cash flow of £4 million for the three months ended June 30, 2025, compared to a positive £6.6 million in the same period last fiscal year.
Increased Borrowings
Endava's borrowings increased to £180.9 million as of June 30, 2025, compared to £136.5 million at March 31, 2025.
Weakness in Europe and TMT Verticals
Revenue from Europe decreased by 13.1%, primarily due to weakness in the TMT and mobility verticals.
Fiscal Year 2026 Cautious Outlook
Endava expects a revenue range of £750 million to £765 million for FY 2026, reflecting a constant currency revenue change of between -1.5% and +0.5%.
Company Guidance
During Endava's fourth quarter and fiscal year 2025 conference call, the company provided guidance for Q1 and the full fiscal year 2026. It was noted that Endava expects revenue for Q1 FY 2026 to be in the range of £181 million to £183 million, reflecting a constant currency revenue decrease between 5% and 6% year-over-year. For the full fiscal year 2026, the revenue is projected to range from £750 million to £765 million, indicating a potential year-over-year change between -1.5% and +0.5%. The adjusted diluted EPS for Q1 is anticipated to be between $0.17 and $0.19 per share, while for the full fiscal year, it is expected to be between £0.82 and £0.94 per share. The company highlighted a cautious outlook due to a volatile operating environment, despite a strong order book in Q4 and a strategic shift towards becoming AI native, with over half of its workforce now leveraging AI in projects.

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
45
Neutral
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
60
Neutral
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
50
Neutral
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.
BreakdownTTMDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue772.25M772.25M740.76M794.73M654.76M446.30M
Gross Profit193.70M193.70M179.71M264.08M217.93M153.83M
EBITDA79.75M79.75M72.19M142.38M113.56M81.27M
Net Income21.21M21.21M17.12M94.16M83.09M43.45M
Balance Sheet
Total Assets935.77M935.77M1.01B770.12M621.86M473.21M
Cash, Cash Equivalents and Short-Term Investments59.47M59.47M62.54M164.76M163.20M70.45M
Total Debt228.05M228.05M202.76M69.01M55.90M63.69M
Total Liabilities352.83M352.83M374.44M198.81M189.13M172.54M
Stockholders Equity582.94M582.94M639.46M571.31M432.72M300.67M
Cash Flow
Free Cash Flow48.07M48.07M48.91M110.84M106.75M82.24M
Operating Cash Flow52.77M52.77M54.39M124.52M120.72M88.35M
Investing Cash Flow-9.94M-9.94M-290.32M-110.85M-23.88M-107.09M
Financing Cash Flow-45.13M-45.13M135.06M-11.00M-5.08M-11.92M

Endava Technical Analysis

Technical Analysis Sentiment
Negative
Last Price8.89
Price Trends
50DMA
12.11
Negative
100DMA
13.88
Negative
200DMA
19.88
Negative
Market Momentum
MACD
-1.02
Positive
RSI
30.87
Neutral
STOCH
14.47
Positive
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 8.89 is below the 20-day moving average (MA) of 10.28, below the 50-day MA of 12.11, and below the 200-day MA of 19.88, indicating a bearish trend. The MACD of -1.02 indicates Positive momentum. The RSI at 30.87 is Neutral, neither overbought nor oversold. The STOCH value of 14.47 is Positive, 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 0 New Risks

Endava Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
69
Neutral
$693.03M21.1635.55%5.76%28.93%
68
Neutral
$1.07B-69.034.88%13.51%
66
Neutral
$557.73M7.08-112.54%-1.23%-11.22%
62
Neutral
$528.07M-51.12-2.60%14.51%58.41%
59
Neutral
$48.81M-56.62-10.37%18.99%77.96%
51
Neutral
$482.97M19.423.37%7.13%23.63%
61
Neutral
$37.18B12.37-10.20%1.83%8.50%-7.62%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
DAVA
Endava
8.89
-16.65
-65.19%
YEXT
Yext
8.67
1.75
25.29%
BAND
Bandwidth
17.52
<0.01
0.06%
JG
Aurora Mobile
8.13
1.20
17.32%
CCSI
Consensus Cloud Solutions
29.39
5.84
24.80%
CINT
CI&T
5.20
-1.59
-23.42%

Endava Corporate Events

Endava PLC Releases 2025 Statutory Accounts
Sep 10, 2025

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
Sep 4, 2025

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.

Endava Announces Executive Team Changes to Drive AI Growth
Jul 8, 2025

On July 8, 2025, Endava plc announced significant changes to its executive team, marking a strategic shift towards a more centralized leadership model. CEO John Cotterell has taken on additional responsibilities for sales and go-to-market strategy following the retirement of COO Julian Bull. Alastair Lukies CBE joins as Chief Engagement Officer, focusing on stakeholder engagement and chairing the newly formed Global Advisory Board aimed at AI-driven growth. Rob Machin returns as Chief People and Locations Officer, succeeding David Churchill, to enhance the company’s engineering culture and client value delivery. These leadership changes are expected to strengthen Endava’s operations and strategic direction, emphasizing AI-led growth and stakeholder relationships.

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.Date of analysis: Sep 07, 2025