We’re cutting our Endava fair value estimate to $42 from $62 after reviewing fourth-quarter results and fiscal 2025 guidance. We’ve dropped our long-term revenue CAGR to 9.7% from 13.6% and trimmed our margin estimates modestly. We maintain our narrow moat rating. Despite the significant haircut to our estimates and fair value estimate, shares continue to look undervalued.
Endava specializes in digital transformation services, which is one of the fastest-growing areas in the IT services market.
High growth expectations for digital transformation services is attracting new competition from big and small players.
|
Metric
|
DAVA
|
ACN
|
EPAM
|
|---|---|---|---|
Price/Earnings (Normalized) | 18.55 | 30.49 | 19.09 |
Price/Book Value | 1.85 | 8.02 | 3.32 |
Price/Sales | 1.60 | 3.55 | 2.52 |
Price/Cash Flow | 18.09 | 19.98 | 17.03 |
|
Metric
|
DAVA
|
ACN
|
EPAM
|
|---|---|---|---|
Quick Ratio | 1.66 | 1.03 | 4.66 |
Current Ratio | 1.74 | 1.16 | 4.84 |
Interest Coverage | 4.32 | 169.13 | — |
|
Metric
|
DAVA
|
ACN
|
EPAM
|
|---|---|---|---|
Return on Assets (Normalized) | 7.91% | 16.59% | 13.16% |
Return on Equity (Normalized) | 10.80% | 35.29% | 16.51% |
Return on Invested Capital (Normalized) | 9.40% | 27.22% | 14.48% |
|
1-Day Chart
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Price
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Morningstar Rating for Stocks
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United States