Endava (NYSE:DAVA) is one of the underperforming tech stocks to buy according to analysts. On May 21, Endava reported a challenging FQ3 2026, with revenue declining 8.4% year-over-year to £178.5 million. The company faced uneven demand and extended deal cycles, leading to significant financial impacts, including a £364.6 million goodwill impairment and a deferred tax asset charge. Consequently, the company recorded a diluted loss per share of £7.55, a sharp downturn from the profit reported in the same period last year.
Despite these near-term obstacles, leadership emphasized a successful strategic pivot toward AI-native delivery. AI-driven business grew from 5% of total revenue a year ago to 15% this quarter, bolstered by new partnerships with Mastercard and Tyl by NatWest. Management maintains that focusing on these high-growth AI initiatives and deepening client relationships will help convert current headwinds into future momentum.
Pixabay/Public domain
Endava (NYSE:DAVA) now anticipates FQ4 revenue to range between £181.0 million and £185.0 million, reflecting a continued year-over-year decline in constant currency. The company expects adjusted diluted EPS for the next quarter to fall between £0.09 and £0.13.
Endava (NYSE:DAVA) is a global technology services company specializing in digital transformation, software engineering, and intelligent automation solutions. Founded in 2000 and headquartered in London, the company serves industries such as payments, financial services, and telecommunications.
While we acknowledge the potential of DAVA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: 33 Stocks That Should Double in 3 Years and Cathie Wood 2026 Portfolio: 10 Best Stocks to Buy.
Disclosure: None. Follow Insider Monkey on Google News.
