Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of Endava plc (NYSE:DAVA), it is a financially-sound company with a strong history and a excellent future outlook. In the following section, I expand a bit more on these key aspects. For those interested in digging a bit deeper into my commentary, take a look at the report on Endava here.
Flawless balance sheet with high growth potential
Investors in search for stocks with room to flourish should look no further than DAVA, with its expected earnings growth of 38% underlying the notable 30% return on equity over the next few years leading up to 2022. In the previous year, DAVA has ramped up its bottom line by 13%, with its latest earnings level surpassing its average level over the last five years. Not only did DAVA outperformed its past performance, its growth also exceeded the IT industry expansion, which generated a 11% earnings growth. This is an optimistic signal for the future.
DAVA’s strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This suggests prudent control over cash and cost by management, which is a crucial insight into the health of the company. DAVA seems to have put its debt to good use, generating operating cash levels of 1263x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.
For Endava, I’ve compiled three key aspects you should further research:
- Valuation: What is DAVA worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether DAVA is currently mispriced by the market.
- Dividend Income vs Capital Gains: Does DAVA return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from DAVA as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of DAVA? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.