Endava Analyst Turns Bullish After Investor Lunch: 'Stock Is Much More Attractive'

Author: Priya Nigam | March 19, 2024 02:10pm

Shares of Endava PLC (NYSE:DAVA) were climbing in early trading on Tuesday.

The pressure on the company’s share price following the recent guidance reduction appears overdone and has left the stock “much more attractive,” according to JPMorgan.

The Endava Analyst: Puneet Jain upgraded the rating for Endava from Neutral to Overweight, while keeping the price target unchanged at $49.

The Endava Thesis: While the company’s near-term guidance seems achievable, any signs of stability or sequential growth in its revenues “could trigger a relief rally,” Jain said in the upgrade note.

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“Perhaps, the key takeaway for us [from the investor lunch hosted by JPMorgan with Endava’s management] was that near-term issues should prove to be cyclical in nature, and the company expects its medium-term growth (FY26 and beyond) should rebound to match the long-term growth rate for disruptive technologies as a whole (pegged at 15-20% or higher),” the analyst wrote.

“Moreover, DAVA’s expertise in payments positions the company well to leverage 'payments as a horizontal' to break ground in other verticals,” he added.

DAVA Price Action: Shares of Endava had risen by 5.89% to $39.11 at the time of publication on Tuesday.

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Image: Courtesy of Endava

Posted In: DAVA