What Do You Need to Know About Endava (DAVA) Before Investing?

Endava logged a 1.1% change during today's afternoon session, and is now trading at a price of $78.6 per share. The S&P 500 index moved 0.4% and the Nasdaq posted a 0.7% change. DAVA's trading volume is 170,425 compared to the stock's average volume of 245,667.

Shares of Endava have a 50-day average price of $75.3226 as of January 2022. Endava plc provides technology services for clients in the consumer products, healthcare, mobility, and retail verticals in Europe, Latin America, North America, and internationally. The mid-cap Technology company has 11,853 full time employees and is based in London, United Kingdom. Endava has not offered any dividends in the last year.

The Company Has a Pattern of Strong Cash Flow and Revenue Growth:

2019-06-30 2020-06-30 2021-06-30 2022-06-30
Revenue (k) $287,930 $350,950 $446,298 $654,757
Revenue Growth n/a 21.89% 27.17% 46.71%
Gross Margins 34.3% 28.5% 34.5% 33.3%
Gross Margins Growth n/a -16.91% 21.05% -3.48%
Operating Margins 11.4% 6.2% 14.2% 14.7%
Operating Margins Growth n/a -45.61% 129.03% 3.52%
Earnings Per Share $0.44 $0.38 $0.76 $1.43
EPS Growth n/a -13.64% 100.0% 88.16%
Free Cash Flow (k) $27,965 $30,363 $82,239 $106,752
FCF Growth n/a 8.58% 170.85% 29.81%
Capital Expenditures (k) -$7,383 -$9,880 -$6,113 -$13,967
Net Debt / EBITDA -1.98 -1.19 -0.07 -0.86

Endava Is Reasonably Valued:

Compared to the Technology sector's average of 26.5, Endava has a trailing twelve month P/E ratio of 90.1 and, according to its EPS guidance of 135.01, an expected P/E ratio of 0.6. Endava's PEG ratio is 0.04 based on its 2378.75% average growth rate of historical and projected earnings per share. This suggests that company's shares are undervalued.

However, Endava's P/B ratio is 16.8 compared to its sector average of 5.57. The company is likely overvalued in terms of its equity. The company's shares are currently trading 783.3% above their fair value as expressed by Benjamin Graham's formula:

√(22.5 * 4-year average EPS * book value per share) = √(22.5 * 0.75 * 4.692) = $8.9

Endava Is the Subject of Mixed Market Indicators:

7 analysts are following Endava and have set target prices ranging from $78.04 to $112.06 per share. On average, they have given the company a rating of buy. At the current price of $78.6, DAVA is trading -20.3% away from its average analyst target price of $98.62 per share, implying an analyst consensus of strong upside potential for the stock.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.