Why Endava (DAVA) Is Down 22.4% After New Partnerships and Lowered Revenue Outlook

• Earlier this week, Paysafe and Endava announced a multi-year partnership aimed at accelerating smarter payments and next-generation community engagement, while TRD U.S.A. expanded its collaboration with Endava as Official IT Consulting Partner for 2026 and beyond.
• These partnerships highlight Endava's efforts to strengthen its position in digital payments and AI-driven technology, even as it reported a first-quarter revenue decline and revised guidance.
• We'll explore how the combination of major new partnerships and weaker earnings reshapes Endava's long-term investment narrative.

AI is about to change healthcare. These 31 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early.

Endava Investment Narrative Recap

To own Endava shares, investors need to believe in the company’s pivot toward AI-focused services and large, long-term digital transformation partnerships as the backbone of future growth. While the new multi-year deals with Paysafe and TRD U.S.A. highlight strategic wins in payments and technology, Endava’s biggest short-term catalyst, successful revenue stabilization following a first-quarter decline, remains largely unaffected by these announcements. Meanwhile, the greatest risk continues to be unpredictability in revenue due to slower AI project pipelines and softening client demand.

Of the week’s major news, Endava’s extended partnership with Toyota Racing Development stands out, reinforcing its capabilities in delivering high-impact digital solutions for demanding clients. Yet, this announcement has limited immediate bearing on the central challenge: demonstrating that the company’s evolving sales strategy can restore short-term revenue momentum, given ongoing weakness in its recent financial results.

However, with these new partnerships offering long-term promise, investors should not overlook the immediate risk of further slippage in AI and digital project conversions...

Read the full narrative on Endava (it's free!)

Endava is forecast to reach £889.6 million in revenue and £62.0 million in earnings by 2028. This outlook assumes annual revenue growth of 4.5% and an increase in earnings of £43.8 million from the current £18.2 million level.

Uncover how Endava's forecasts yield a $17.08 fair value, a 147% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members valued Endava shares between £9.43 and £27.06, with 9 distinct forecasts. With conversion of AI-led projects still slow, the range of opinion reflects uncertainty around execution and profitability.

Explore 9 other fair value estimates on Endava - why the stock might be worth just $9.43!

Build Your Own Endava Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Endava research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Endava research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Endava's overall financial health at a glance.

Seeking Other Investments?

The market won't wait. These fast-moving stocks are hot now. Grab the list before they run:

• These 15 companies survived and thrived after COVID and have the right ingredients to survive Trump's tariffs. Discover why before your portfolio feels the trade war pinch.
• Find companies with promising cash flow potential yet trading below their fair value.
• We've found 15 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com