DAVA Stock Forecast & Price Target

Endava is well-positioned for long-term growth as it leverages digital engineering and transformation services to generate double-digit organic growth, with support from potential tuck-in M&A. Although near-term revenue and margins may be volatile, Endava's deep domain expertise in high-growth verticals and its position as a pure-play on the digital transformation market make it an attractive investment opportunity. However, the company's exposure to the financial services sector and potential weakness in technology spending may pose some risk to its growth. With a P/E multiple of ~7x our FY27 EPS estimate, we believe Endava's current valuation is undervalued and provides an attractive medium-term risk/reward for investors.

Endava is facing pressure on its financial outlook due to short-term turbulence and an unexpected credit in their recent earnings report. Additionally, the company's focus on transitioning towards an AI-native delivery model may lead to near-term demand volatility and higher expenses. With slow technology spend in uncertain macroeconomic environments and competition from other IT services providers, it may be difficult for Endava to meet its revised FY26 revenue and EPS outlook, leading to a negative investment outlook.