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Endava
(NYSE:DAVA)
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Rating:44Neutral
Price Target:
$3.00
▼(-38.02% Downside)
Action:Reiterated
Date:05/23/26
The score is pressured primarily by weakening financial performance (negative growth, margin compression, and a very large net loss) and a strongly bearish technical setup (below all key moving averages with negative MACD). Earnings-call guidance and pipeline conversion issues reinforce the near-term risk, while strategic AI/productization progress provides some longer-term support but not enough to lift the score materially today.
Positive Factors
AI-driven revenue ramp
Endava’s AI-driven revenue rising to 15% reflects a structural shift to higher-margin, productized services. Over 2–6 months this supports more predictable, value-based engagements, higher realized rates on AI work, and a durable avenue to expand margins as AI workloads scale across clients.
Negative Factors
Revenue decline and margin compression
Sustained revenue declines and compressed gross margins erode operating leverage and long-term profitability. If secular client spending weakens or pricing pressure continues, Endava may face persistent margin drag that limits reinvestment in productization and slows recovery of adjusted profitability.
Read all positive and negative factors
Positive Factors
Negative Factors
AI-driven revenue ramp
Endava’s AI-driven revenue rising to 15% reflects a structural shift to higher-margin, productized services. Over 2–6 months this supports more predictable, value-based engagements, higher realized rates on AI work, and a durable avenue to expand margins as AI workloads scale across clients.
Read all positive factors
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 (DAVA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$157.38M
Dividend YieldN/A
Average Volume (3M)367.91K
Price to Earnings (P/E)―
Beta (1Y)1.34
Revenue Growth-2.00%
EPS Growth-2798.10%
CountryUS
Employees11,668
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)-7.97
Shares Outstanding40,782,810
10 Day Avg. Volume272,512
30 Day Avg. Volume367,908
Financial Highlights & Ratios
PEG Ratio1.28
Price to Book (P/B)1.12
Price to Sales (P/S)0.84
P/FCF Ratio13.57
Enterprise Value/Market Cap1.92
Enterprise Value/Revenue0.41
Enterprise Value/Gross Profit2.04
Enterprise Value/Ebitda-0.89
Forecast
1Y Price Target
$4.10Price Target Upside-15.29% Downside
Rating ConsensusHold
Number of Analyst Covering7
EPS Forecast (FY)0.59
Revenue Forecast (FY)$734.56M
Endava Business Overview & Revenue Model
Company Description
Endava plc, established in 2000 and headquartered in London, UK, provides extensive technology and digital transformation services to a worldwide customer base. They serve diverse verticals, including consumer products, healthcare, mobility, and r...
How the Company Makes Money
Endava primarily makes money by providing professional services to client organizations, earning revenue from delivering digital transformation and software engineering work. Its core revenue model is services-based: (1) Time-and-materials/managed...
Endava Earnings Call Summary
Earnings Call Date:May 21, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Sep 22, 2026
Earnings Call Sentiment Negative
The call contained meaningful strategic progress — notably faster AI-driven revenue growth (up to 15% of revenue), stronger partnerships (Mastercard, Google, OpenAI), accelerated Dava.Flow adoption (12 clients), and productized marketplace momentum — all positive signs for Endava’s long-term pivot to AI-native delivery. However, these strategic wins were overshadowed by significant near-term financial and operational headwinds: an 8.4% YoY revenue decline, extended sales cycles and weaker pipeline conversion, a large non-cash goodwill impairment (GBP 364.6m) driving a GBP 372m loss before tax, sharply compressed adjusted margins and EPS, negative free cash flow in the quarter, and higher borrowings. Management emphasized these impairments are non-cash and framed many issues as timing and execution challenges while reiterating investments in AI skills and GTM. Balancing the sizable one-off impairments and current operating softness against encouraging progress on AI productization and strategic client wins, the near-term financial picture is weak despite promising long-term positioning.Positive Updates
AI-driven revenue acceleration
AI-driven business grew from 5% of revenue in Q3 FY25 to 15% of revenue (GBP 27 million) in Q3 FY26, showing meaningful traction in the company pivot to AI-native delivery. Management highlighted higher margins on AI-driven work versus traditional digital transformation.
Negative Updates
Quarterly revenue decline
Revenue for Q3 FY26 was GBP 178.5 million versus GBP 194.8 million a year ago, an 8.4% year-over-year decrease (constant currency decline of 6.4%). Management cited slower pipeline conversion, Middle East client delays, macro-driven demand weakness and extended execution timelines for large outcome-based contracts.
Read all updates
Q3-2026 Updates
Positive
Negative
AI-driven revenue acceleration
AI-driven business grew from 5% of revenue in Q3 FY25 to 15% of revenue (GBP 27 million) in Q3 FY26, showing meaningful traction in the company pivot to AI-native delivery. Management highlighted higher margins on AI-driven work versus traditional digital transformation.
Read all positive updates
Company Guidance
Endava guided Q4 FY2026 revenue of GBP 181–185 million (a constant‑currency decline of roughly 3.5% to 1.0% year‑over‑year) with adjusted diluted EPS of 9p–13p, and full FY2026 revenue of GBP 721.8–725.8 million (management indicated a ~6%–5% constant‑currency decline year‑over‑year) with adjusted diluted EPS of 45p–49p; the guidance assumes FX rates at April 30, 2026 (GBP1 = USD1.35, EUR1 = 1.16), management reported contracted/committed coverage for Q4 at about 97% of the GBP181m low end and ~95% of the GBP185m high end (leaving roughly GBP 5m–9m of pipeline to convert), and noted an expected adjusted tax rate of ~17% in Q3 rising to ~37% in Q4 for an estimated full‑year adjusted tax rate of ~25%.Endava Financial Statement Overview
Summary
Income Statement
38
Negative
Balance Sheet
57
Neutral
Cash Flow
52
Neutral
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 729.10M | 772.25M | 740.76M | 794.73M | 654.76M | 446.30M |
| Gross Profit | 148.10M | 198.10M | 188.81M | 264.08M | 217.93M | 154.18M |
| EBITDA | -337.86M | 67.46M | 59.57M | 142.38M | 113.56M | 79.19M |
| Net Income | -416.85M | 21.21M | 17.12M | 94.16M | 83.09M | 43.45M |
Balance Sheet | ||||||
| Total Assets | 538.86M | 935.77M | 1.01B | 770.12M | 621.86M | 473.21M |
| Cash, Cash Equivalents and Short-Term Investments | 48.58M | 59.47M | 62.54M | 164.76M | 163.20M | 70.45M |
| Total Debt | 238.62M | 228.05M | 202.76M | 69.01M | 55.90M | 63.69M |
| Total Liabilities | 366.22M | 352.83M | 374.44M | 198.81M | 189.13M | 172.54M |
| Stockholders Equity | 172.65M | 582.94M | 639.46M | 571.31M | 432.72M | 300.67M |
Cash Flow | ||||||
| Free Cash Flow | 17.69M | 48.07M | 48.91M | 110.84M | 106.75M | 82.24M |
| Operating Cash Flow | 33.46M | 52.77M | 54.39M | 124.52M | 120.72M | 87.67M |
| Investing Cash Flow | -19.18M | -9.94M | -290.32M | -110.85M | -23.88M | -106.41M |
| Financing Cash Flow | -34.27M | -45.13M | 135.06M | -11.00M | -5.08M | -11.92M |
Endava Technical Analysis
Negative
4.84
Price Trends
3.27
Negative
3.98
Negative
5.65
Negative
Market Momentum
-0.11
Negative
41.30
Neutral
25.97
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 4.84 is above the 20-day moving average (MA) of 2.81, above the 50-day MA of 3.27, and below the 200-day MA of 5.65, indicating a bearish trend. The MACD of -0.11 indicates Negative momentum. The RSI at 41.30 is Neutral, neither overbought nor oversold. The STOCH value of 25.97 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 |
|---|---|---|---|---|---|---|---|
76 Outperform | $687.16M | 8.09 | 5285.71% | ― | 0.47% | 6.39% | |
65 Neutral | $428.65M | 10.44 | 13.20% | ― | 16.05% | 31.07% | |
64 Neutral | $507.26M | 15.71 | 32.32% | ― | 2.43% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $2.51B | -445.68 | -1.28% | ― | 4.88% | -534.80% | |
59 Neutral | $25.55M | 47.47 | 0.58% | ― | 13.23% | ― | |
44 Neutral | $157.38M | -0.26 | -88.28% | ― | -2.00% | -2798.10% |
* Technology Sector Average
DAVA
Endava
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Endava Corporate Events
Endava Swings to Heavy Q3 Loss on Goodwill Hit as It Accelerates AI and Payments Pivot
May 21, 2026
Endava reported results for the quarter ended March 31, 2026, showing an 8.4% year-on-year revenue decline to £178.5 million and a sharp swing to a £394.4 million net loss, driven largely by a £364.6 million goodwill impairment and ...
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.