Endava Stock Shows Strength In Rough Market

On Oct 1, 2021

Endava Plc Cl A Ads

DAVA

$3.91

2.87%

63%

IBD Stock Analysis

DAVA stock nearing 143.60 buy point from 7-week consolidation
Relative strength line hitting new highs in bullish sign
With market in correction, investors should be cautious

Composite Rating

Industry Group Ranking

Emerging Pattern

Consolidation

* Not real-time data. All data shown was captured at
1:55PM EDT on
10/01/2021.

Technology services provider Endava (DAVA) is the IBD Stock Of The Day as its relative strength line hits a new high in an unsettled market. Endava stock is nearing an entry point after reporting fiscal fourth-quarter earnings that topped expectations.

DAVA stock had delayed reporting its June-quarter earnings, which were released Sept. 28. Also, the tech services company issued fiscal 2022 revenue guidance above consensus estimates.

U.K.-based Endava belongs to the Computer-Technical Services industry group along with Accenture (ACN), Epam Systems (EPAM) and Globant (GLOB). The IT services group ranks eighth out of 197 industry groups that IBD tracks.

Endava focuses on new technology, custom product development and digital transformation work. Its biggest customers are in the finance, telecommunications and retail industries. Founded in 2000, the company has its headquarters in London.

Endava stock trades about 3% below an entry point of 143.60. DAVA stock has been consolidating for seven weeks, according to IBD MarketSmith charts.

Banking Customers A Bright Spot

Endava stock has a Relative Strength Rating of 95 out of a best-possible 99. The 95 RS Rating means that Endava stock is outperforming 95% of all stocks in terms of price strength. The market’s biggest winners typically have an 80 or better RS Rating.

Meanwhile, the IT services firm’s relative strength line has hit a new high. Stocks showing strength during market corrections often become leaders in the next uptrend.

In the June quarter, Endava’s revenue rose 65% to $184.6 million including acquisitions. Earnings per share jumped 104% to 57 cents.

Endava forecast fiscal 2022 revenue growth in a range of 38% to 40%.

“Helped by acceleration from North America and good growth across the payments/banking vertical, DAVA put up another strong quarter,” Susquehanna analyst James Friedman said in a report.

He added, “Supported by a sharp increase in new accounts and average spend, visibility has improved across geographies and verticals.”

DAVA Stock: Hiring Ramps Up

A small-cap stock, Endava holds a Composite Rating of 98, according to IBD Stock Checkup. IBD’s Composite Rating combines five separate proprietary ratings of fundamental and technical performance. The best growth stocks have a Composite Rating of 90 or better.

However, Deutsche Bank analyst Bryan Keane has a hold rating on Endava stock.

“DAVA stock continues to expand its scope of work with existing clients while adding new logos as total client numbers grew…