Globant/Endava: Initiating Coverage on Two Digital Transformation Leaders; Endava Undervalued

We're initiating coverage on two narrow-moat information technology services companies that specialize in digital transformation services. We think narrow-moat Globant is fairly valued with a $201 fair value estimate. In contrast, we think narrow-moat Endava is undervalued with a $77 fair value estimate, which puts the stock in 4-star territory. Endava is enduring a larger growth downturn than Globant in the current challenging environment given its high exposure to private equity, which we think has caused investors with a short investment horizon to sell the stock.