Endava Is A Fintech Enabler, Wedbush Says In Bullish Initiation

Endava PLC DAVA is among the fastest-growing digital IT services stocks, with an impressive track record of generating 20%-25% revenue growth and more than 25% earnings growth, according to Wedbush.

The Endava Analyst

Moshe Katri initiated coverage of Endava with an Outperform rating and $60 price target.

The Endava Thesis

International Data Corporation estimates the global market for digital transformation services at approximately $450 billion in 2019 and expects it to grow at a compound annual rate of 15.3% to reach $796 billion by 2023, Katri said in the Tuesday initiation note. (See his track record here.)

The fintech space contributes around 50% of Endava’s sales, and the company has differentiated talents and capabilities in this space, he said. 

Endava has not been impacted more severely than peers by COVID-19, as its structure does not require substantial travel, and the company has likely been working on business continuity plans to deliver projects from remote locations, Katri said. 

Endava has been consistently exceeding long-term targets since its initial public offer, the analyst said.

The company has been improving utilization rates and this, combined with pricing power, has enabled it to expand margins, according to Wedbush.

DAVA Price Action

Shares of Endava were up 0.2% at $48.51 at the time of publication Wednesday. 

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