DAVA Stock Forecast & Price Target

Endava is well positioned to benefit from a rebound in digital transformation spending because its core engineering and consulting capabilities align with clients’ push toward next-generation technologies, including AI and GenAI. Its outcome-based Dava.Flow offering has already scaled to £27mm, or 15% of revenue, with 12 client deployments and margins described as materially higher than legacy time-and-materials work, supporting a more attractive mix shift from 77% in FY25 to about 71% in F3Q26. Despite near-term revenue softness and a FY26 adjusted PBT margin expected near 5%, the company’s deep presence in payments, financial services, TMT, retail and CPG, plus potential tuck-in M&A, underpins a credible path to double-digit organic growth over the long term.

Endava is facing a deteriorating fundamental backdrop marked by a below-expectations F3Q26 performance, with revenue of £178.5 million, adjusted PBT margin of 1.8%, and adjusted diluted EPS of £0.05 all missing estimates, while FY26 revenue guidance was cut to £721.8–£725.8 million and EPS to £0.45–£0.49. The weakness is concentrated in its core end markets and geographies: only Payments grew, while all other verticals declined and the UK, North America, and Europe all posted lower revenue, underscoring Endava’s heavy client and regional concentration risk. On top of operating pressure, negative free cash flow of £3.1 million, £48.4 million cash versus £195.8 million debt, and an accounting investigation that delayed 4QFY26 reporting raise governance and execution concerns.