Endava (DAVA, Financial) experienced a substantial drop in its share price, decreasing by 30.3% to $14.93. This decline represents a loss of $6.48 per share. Investors might consider analyzing this movement to understand the potential risks and opportunities associated with this stock.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 9 analysts, the average target price for Endava PLC (DAVA, Financial) is $30.08 with a high estimate of $50.50 and a low estimate of $20.20. The average target implies an upside of 100.43% from the current price of $15.01. More detailed estimate data can be found on the Endava PLC (DAVA) Forecast page.
Based on the consensus recommendation from 11 brokerage firms, Endava PLC's (DAVA, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Endava PLC (DAVA, Financial) in one year is $66.47, suggesting a upside of 342.84% from the current price of $15.01. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Endava PLC (DAVA) Summary page.
DAVA Key Business Developments
Release Date: February 20, 2025
- Revenue: GBP195.6 million for the three months ending December 31, 2024, a 6.6% increase from the prior year.
- Constant Currency Revenue Growth: 9.1% increase from the same period in the prior year.
- Profit Before Tax: GBP2.5 million for the three months ending December 31, 2024, compared to GBP10.6 million in the prior year.
- Adjusted Profit Before Tax (PBT): GBP21.8 million, with an adjusted PBT margin of 11.2%.
- Adjusted Diluted Earnings Per Share (EPS): 30p for the three months ended December 31, 2024.
- Adjusted Free Cash Flow: GBP31.6 million for the three months ended December 31, 2024.
- Cash and Cash Equivalents: GBP60.1 million as of December 31, 2024.
- Borrowings: GBP123.7 million as of December 31, 2024.
- Capital Expenditure: 0.2% of revenue for the three months ended December 31, 2024.
- Revenue from Top 10 Clients: 36% of total revenue for the three months ending December 31, 2024.
- Regional Revenue Distribution: North America 39%, Europe 24%, UK 32%, Rest of the World 5%.
- Share Repurchase Program: $100 million, subject to shareholder approval.
- Guidance for Q3 Fiscal Year 2025: Revenue expected between GBP198 million to GBP200 million; adjusted diluted EPS between 31p to 32p.
- Full Year Fiscal Year 2025 Guidance: Revenue expected between GBP795 million to GBP800 million; adjusted diluted EPS between 120p to 123p.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Endava PLC (DAVA, Financial) reported a 6.6% increase in revenue for the quarter, with a 9.1% increase in constant currency, indicating strong financial performance.
- The company announced its first share buyback program totaling $100 million, demonstrating a commitment to optimizing capital allocation.
- Endava PLC (DAVA) is experiencing strong growth in the banking and capital markets sector, with a 43.6% increase over the past 12 months.
- The company is leveraging AI-enabled capabilities like Morpheus and Compass to accelerate client transformations, contributing to a solid pipeline of opportunities.
- Client satisfaction remains high, with 92% of clients likely to recommend Endava PLC (DAVA) and 90% likely to repurchase services.
Negative Points
- Profit before tax decreased significantly to GBP2.5 million from GBP10.6 million in the same period last year, indicating a decline in profitability.
- The adjusted PBT margin decreased to 11.2% from 12.4% in the prior year, reflecting margin pressure.
- Endava PLC (DAVA) is facing challenges in the payments vertical, with some larger clients reducing spend.
- The company has seen increased softness in the UK and Rest of World regions due to a worsening macroeconomic environment, leading to unplanned project ramp downs and delays.
- Revenue from Europe and the Rest of the World declined, with Europe down 0.6% and the Rest of the World down 43.5%, indicating regional challenges.
