Earnings Preview: Endava

Endava DAVA announces its next round of earnings this Wednesday, February 17. Here is Benzinga's everything-that-matters guide for this Wednesday's Q2 earnings announcement.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Endava EPS will likely be near $26.1 while revenue will be around $143.26 million, according to analysts. Endava reported a profit of $0.4 per share when it published results during the same quarter last year. Sales in that period totaled $114.25 million.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

The Wall Street consensus estimate for earnings would represent a 6425.0% increase for the company. Sales would be up 25.39% from the same quarter last year. Endava's reported EPS has stacked up against analyst estimates in the past like this:

Stock Performance

Over the last 52-week period, shares are up 59.17%. Given that these returns are generally positive, long-term shareholders can be content going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Endava is scheduled to hold the call at 08:00:00 ET and can be accessed here.