DAVA Stock Forecast & Price Target

Endava's headcount increased by 1% sequentially, reflecting the company's commitment to investing in AI initiatives, which aligns with expected demand in key industry verticals. The company experienced a year-over-year growth boost of approximately 100 basis points from mergers and acquisitions, indicating strategic expansion efforts. With the anticipated acceleration in digital transformation and AI spending, Endava is well-positioned for robust long-term growth, expecting to achieve over 20% organic growth supported by strong engineering capabilities and improving market conditions.

Endava's financial outlook appears negative due to F4Q25 revenue falling short of management's expectations, as the company focused on reducing a long tail of less-profitable clients. Furthermore, management's guidance for FY26 forecasts a modest decline or minimal growth, compounded by significant revenue decreases in North America and Europe, where client project delays have become apparent. The company's strategic investments in AI and the reinstatement of bonuses have added pressure on expenses, leading to a projected revenue drop of 7.2% to 6.2% year-over-year in the upcoming quarter, indicating continued demand softness in key segments such as payments and technology.