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Endava PLC ADR DAVA

Morningstar Rating
$24.73 −0.73 (2.87%)
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Company Report

Endava Earnings: Further Visibility on Recovery Well Received

Narrow-moat Endava reported third-quarter results and guidance broadly in line with our expectations, which sent shares up over 10% in early trading. Following the acquisition of GalaxE, Endava now expects fiscal-year 2024 revenue of GBP 741 million-GBP 743 million, representing a constant-currency decline of between 4.5% and 4% versus fiscal 2023, and adjusted diluted EPS to be GBP 1.13-GBP 1.14. As we noted last quarter, amid serious doubts over the path of revenue recovery following their slashed outlook for the year, Endava needs several quarters of positive results to regain investor confidence. With no expected changes to forecasts, we maintain our fair value estimate of $62, and we see the shares as undervalued.

Price vs Fair Value

DAVA is trading at a 628% premium.
Price
$25.46
Fair Value
$18.00
Uncertainty
High
1-Star Price
$42.40
5-Star Price
$64.20
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Endava specializes in digital transformation services, which is one of the fastest-growing areas in the IT services market.

Bears

High growth expectations for digital transformation services is attracting new competition from big and small players.

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News

Trading Information

Previous Close Price
$25.46
Day Range
$24.6225.51
52-Week Range
$24.6281.06
Bid/Ask
$24.68 / $26.05
Market Cap
$1.43 Bil
Volume/Avg
709,475 / 664,641

Key Statistics

Price/Earnings (Normalized)
15.06
Price/Sales
1.61
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield

Company Profile

Endava is a next-generation IT services company that primarily assists clients with their digital transformation efforts by creating customized software for them. The company was founded in 2006 in the U.K. and it continues to generate the majority of revenue in the U.K. and Europe. Endava’s client base is concentrated in the payments and financial services, technology, media, and telecom industries.
Sector
Technology
Industry
Software - Infrastructure
Stock Style Box
Total Number of Employees
11,025

Competitors

Valuation

Metric
DAVA
EPAM
ACN
Price/Earnings (Normalized)
15.0616.4924.01
Price/Book Value
1.862.967.14
Price/Sales
1.612.262.83
Price/Cash Flow
13.3714.3917.04
Price/Earnings
DAVA
EPAM
ACN

Financial Strength

Metric
DAVA
EPAM
ACN
Quick Ratio
3.434.521.13
Current Ratio
3.434.681.26
Interest Coverage
168.58
Quick Ratio
DAVA
EPAM
ACN

Profitability

Metric
DAVA
EPAM
ACN
Return on Assets (Normalized)
11.10%13.85%17.18%
Return on Equity (Normalized)
14.57%17.53%36.65%
Return on Invested Capital (Normalized)
11.76%15.38%28.45%
Return on Assets
DAVA
EPAM
ACN
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