DAVA - Endava: Attractive Investment Opportunity As Secular Tailwinds Remain Intact
2024-05-06 10:42:07 ET
Summary
- The market is extrapolating near term worries and is pricing Endava as a mature business.
- I believe long-term tailwinds remain intact. This mismatch creates an opportunity to invest in Endava at an attractive valuation for investors that believe the same.
- Given its relative smaller size, Endava also has a better opportunity to make more meaningful acquisitions at high rates of return. This may help offset the slowdown in organic growth.
At a high level, Endava plc ( DAVA ) advises businesses on how they can better interact with customers using technology, and after advising, actually builds and maintains the products that they plan with these businesses. Endava does business around the world, but the majority is in Europe (~60%), followed by North America (~30%), and Asia/Middle East (~10%). The majority of Endava’s revenue is generated from clients that operate in payments, financial services, and insurance companies (~50%), Telecommunications, Media, and Technology (~25%), and transportation....
Endava: Attractive Investment Opportunity As Secular Tailwinds Remain Intact