BofA: Investors pour into bonds, pull back from crypto
On Wednesday, TD Cowen analysts adjusted their stance on Endava PLC (NYSE:DAVA), currently trading at $15.64 with a market capitalization of $929 million, downgrading the stock from Buy to Hold. Accompanying this downgrade, the firm also reduced the price target from $27.00 to $17.00. The analysts cited a challenging period for the company, as evidenced by the downside to Endava’s third-quarter performance and a lowered outlook for the fourth quarter. According to InvestingPro analysis, the stock appears undervalued at current levels, with 8 additional exclusive insights available to subscribers.
The analysts noted that this recent performance marked another frustrating update from the company, which has been struggling to navigate through current market conditions, with year-to-date returns down 30.7% and revenue declining by 0.77%. The decision to lower the rating reflects TD Cowen’s view that there is limited potential for revenue growth recovery and earnings expansion for Endava in the year ahead. InvestingPro data shows the company maintains a FAIR financial health score of 2.2, with detailed analysis available in the comprehensive Pro Research Report.
Endava’s peers in the sector are demonstrating more stability, according to the TD Cowen analysts. This contrast may lead investors to seek more attractive investment opportunities elsewhere, which could result in a prolonged period before Endava’s stock recovers.
The reduced price target of $17.00 from the previous $27.00 indicates a more conservative outlook on the company’s financial prospects. The analysts emphasized that the downgrade to Hold was influenced by the expectation of a challenging road ahead for Endava in terms of financial performance and stock recovery.
Endava PLC, facing these headwinds, will be under close watch by investors as they assess the company’s strategies to return to growth and stability in a competitive and evolving market landscape.
In other recent news, Endava PLC reported its Q2 FY2025 earnings, where the company’s adjusted diluted EPS exceeded expectations at 0.3p, though revenue slightly missed projections at £195.6 million. Despite the revenue shortfall, Endava’s strategic focus on AI initiatives and a 32.7% revenue increase in North America contributed to positive investor sentiment. Meanwhile, Needham analysts adjusted their outlook on Endava, reducing the price target from $43.00 to $38.00 but maintaining a Buy rating due to the company’s effective cost management strategies and potential growth driven by AI adoption. Separately, Endava announced a strategic partnership with AlixPartners to enhance digital transformation services across multiple sectors, leveraging AI, cloud adoption, and data analytics expertise. Additionally, Endava has joined OpenAI’s Beta Services Partner Program, formalizing a collaboration aimed at advancing enterprise AI adoption. BofA Securities maintains a Neutral rating for Endava, highlighting challenges such as demand softness and conversion issues in its business pipeline. To mitigate stock price risk, Endava increased its share repurchase authorization by $50 million, totaling approximately $110 million.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.