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Investing.com - Guggenheim lowered its price target on Endava PLC (NYSE:DAVA) to $18.00 from $20.00 on Friday, while maintaining a Buy rating on the stock. According to InvestingPro data, the stock is currently trading at $9.97, significantly below its 52-week high of $34.94, with a price-to-book ratio of 0.69.
The price target reduction follows Endava’s quarterly underperformance and a softer-than-expected fiscal year 2026 outlook, which Guggenheim attributes to macroeconomic headwinds and challenges in navigating the evolving artificial intelligence landscape. The stock has experienced significant pressure, falling 32% in the past week and over 67% year-to-date.
Despite the price target cut, Guggenheim maintained its Buy rating on the technology services company, citing an "undemanding valuation" that still makes the stock attractive for investors.
Guggenheim removed Endava from its "Best Idea" list, noting that business momentum will likely take time to materialize for the company.
The firm characterized management’s conservative approach to its FY26 outlook as "compelling" despite the near-term challenges facing the company.
In other recent news, Endava reported its fourth-quarter fiscal year 2025 earnings, showing a slight beat on earnings per share (EPS) with a figure of £0.24, surpassing the forecast of £0.23. Revenue for the quarter was £186.8 million, in line with expectations but representing a 3.9% decline compared to the previous year. Despite the EPS beat, the company’s guidance for the first quarter and fiscal year 2026 was below consensus, leading to cautious sentiment among investors. In response to these developments, Needham adjusted its price target for Endava to $12.00 from $20.00, while maintaining a Buy rating on the stock. The adjustment reflects concerns about cautious client spending and future growth prospects. These recent developments have captured the attention of analysts and investors alike, highlighting the challenges Endava faces in the current market environment.
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