Endava plc (DAVA) Stock Analysis and Metrics

Sector: Technology Industry: Software - Infrastructure CIK: 0001656081

P/B 0.58

P/E 30.51

P/S 0.44

Market Cap 445.67 Mn

ROIC (Qtr) 2.09

Div Yield % 0.00

Rev 1y % (Qtr) -6.18

Total Debt (Qtr) 327.42 Mn

Debt/Equity (Qtr) 0.43

About

Endava plc, a leading next-generation technology services provider, operates under the stock symbol DAVA and offers a range of technology services to various industries. The company's main business activities include providing product and technology strategies, intelligent digital experiences, and world-class engineering to a diverse group of clients spread across the United Kingdom, Europe, Latin America, North America, Asia-Pacific, and the Middle East. Endava generates revenue primarily through its digital strategies, engineering, and technology...

Endava plc, a leading next-generation technology services provider, operates under the stock symbol DAVA and offers a range of technology services to various industries. The company's main business activities include providing product and technology strategies, intelligent digital experiences, and world-class engineering to a diverse group of clients spread across the United Kingdom, Europe, Latin America, North America, Asia-Pacific, and the Middle East.

Endava generates revenue primarily through its digital strategies, engineering, and technology solutions. Its digital strategies involve helping clients become digital, experience-driven businesses by assisting them from idea generation to development and deployment of products, platforms, and solutions. Endava's engineering services involve designing and building software solutions across various industries, including e-commerce, product management, mobile, supply chain and fulfillment, payments, and customer relationship management. The company's technology solutions include platforms, marketplaces, and immersive environments that have elevated the experience for gamers and clients in the payments, banking and asset and wealth management, insurance, and retail and consumer goods industries.

Endava has a strong competitive position within the industry. Its competitive strengths include its ideation through production capabilities, proven proprietary framework for distributed agile delivery at scale, expertise in next-generation technologies, and strong domain expertise in various industries. The company's ability to deliver large-scale distributed agile projects, its expertise in next-generation technologies, and its strong domain expertise in various industries have enabled it to establish itself as a leader in the technology services industry, differentiating it from competitors such as Accenture, Capgemini, IBM, Infosys, Wipro, and TCS.

Endava's customers include leading companies in various industries, including payments, banking and asset and wealth management, insurance, technology, media, and telecommunications, retail and consumer goods, healthtech, and mobility. The company's capabilities include product strategy, growth marketing, analytics, technology strategy, enterprise architecture, distributed agile delivery, cloud application engineering, platform engineering, software security, test engineering, data engineering and platforms, artificial intelligence, VR, AR, XR development, modern application management, managed cloud, service delivery, and smart desk.

Endava's frameworks, methods, and tools, including TEAM and TEAS, enhance its ability to develop and deploy solutions based on next-generation technologies. The company's proven practices drive quality and effectiveness, driving value-focused delivery and delivering engineering excellence tailored to the delivery context such as complexity, criticality, and risk. Chronos, Endava's proprietary software analysis tool, detects traits and "anti-patterns" of a software system by innovatively combining data points from multiple relevant artifacts around development. Chronos offers several benefits to Endava's clients and employees, including quality and productivity improvement by providing deep insights into the evolution of large-scale software systems.

Stock Price Chart

Analysis

Pros

Healthy cash reserves of 63.82M provide 3.34x coverage of short-term debt 19.09M, demonstrating strong liquidity position and minimal refinancing risk.
Retained earnings of 725.30M provide full 2.35x coverage of long-term debt 308.33M, indicating strong internal capital position.
Tangible assets of 473.66M provide robust 33.58x coverage of other current liabilities 14.11M, indicating strong asset backing.
Retained earnings of 725.30M provide strong 51.42x coverage of other current liabilities 14.11M, indicating earnings quality.
Operating cash flow of 81.96M fully covers other non-current liabilities 20.53M by 3.99x, showing strong long-term stability.

Cons

Operating cash flow of 81.96M barely covers its investment activities of (20.24M), with a coverage ratio of -4.05, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
Cash reserves of 63.82M provide limited coverage of acquisition spending of (13.85M), which is -4.61x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
Operating cash flow of 81.96M is outpaced by equity issuance of (118.49M) (-0.69 ratio), indicating concerning reliance on equity markets for funding operations.
R&D investment of 0 represents just 0x of SG&A expenses of 214.60M, indicating potential underinvestment in innovation relative to administrative overhead.
Other non-current assets of 28.01M provide minimal coverage for long-term debt of 308.33M, which is 0.09x, indicating potential asset-liability mismatch.

Peer Comparison

Companies in the Software - Infrastructure

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	MSFT	Microsoft Corp	3,542.10 Bn	33.76	12.06	60.56 Bn
2	ORCL	Oracle Corp	533.93 Bn	34.61	8.75	124.39 Bn
3	PLTR	Palantir Technologies Inc.	437.56 Bn	399.47	112.31	0.24 Bn
4	PANW	Palo Alto Networks Inc	125.16 Bn	112.03	13.10	0.35 Bn
5	CRWD	CrowdStrike Holdings, Inc.	120.85 Bn	-384.67	26.47	0.82 Bn
6	SNPS	Synopsys Inc	71.69 Bn	35.89	11.14	15.14 Bn
7	NET	Cloudflare, Inc.	67.84 Bn	-658.43	33.70	3.50 Bn
8	FTNT	Fortinet, Inc.	63.33 Bn	33.80	9.66	1.00 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	0.74	2.56
EV to Cash from Ops.	11.39	38.32
EV to Debt	2.85	-11.37
EV to EBIT	36.94	-12.79
EV to EBITDA	21.63	7.72
EV to Free Cash Flow [EV/FCF]	11.39	24.22
EV to Market Cap	2.09	0.58
EV to Revenue	0.91	-35.00
Price to Book Value [P/B]	0.58	3.74
Price to Earnings [P/E]	30.51	-18.61

Dividend Metrics

Metric	Value	Industry
Dividend Coverage Ratio	0.00	-0.30
Dividend Payout Ratio %	0.00	2.69
Dividend per Basic Share	0.00	0.10
FCF Dividend Payout Ratio %	0.00	1.67
Interest Coverage	2.57	-13.15

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	0.00	-404.11
Cash and Equivalents Growth (1y) %	-8.16	226.02
Dividend Growth (1y) %	0.00	-0.27
EBIAT Growth (1y) %	133.16	31.15
EBITDA Growth (1y) %	0.00	49.02
EBIT Growth (1y) %	24.39	25.85
EBT Growth (1y) %	-15.44	17.82
EPS Growth (1y) %	34.30	70.69
FCF Growth (1y) %	47.68	295.45
Gross Profit Growth (1y) %	7.91	49.96

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	1.09	0.68
Cash Payout Ratio	0.00	0.02
Cash Ratio	0.39	1.21
Current Ratio	2.18	2.57
Debt to Equity Ratio	0.43	-0.93
Interest Cover Ratio	2.57	-13.15
Times Interest Earned	2.57	-13.15

Profitability

Metric	Value	Industry
EBITDA Margin %	0.00	-544.82
EBIT Margin %	1.83	-197.78
EBT Margin %	1.51	-602.74
Gross Margin %	24.20	52.06
Net Profit Margin %	1.40	-605.52

Endava plc (NYSE: DAVA)