Endava is expected to report higher revenue but lower earnings for the fourth quarter of fiscal 2023 when it hands down its latest financial results before the stock market opens on Tuesday, September 19.
For the quarter, Endava said it expects its revenue to be in the range of £187 million (US$231.9 million) to £189 million (US$234.3 million), representing constant currency revenue growth between 3% and 4%, and earnings per share (EPS) in the range of £0.44 (US$0.55) to £0.45 (US$0.56) per share.
Wall Street analysts, on average, expect the London-based technology company to report revenue growth of about 4.5% year-over-year for 4Q.
They estimate revenue of about £191.2 million (US$237.1 million) compared to £180.4 million (US$226.8 million) in the year-ago quarter, according to Zacks Consensus Estimate.
They also forecast earnings per share of about £0.45 (US$0.56), a 12.5% drop from EPS of £0.51 (US$0.64) for the same period last year.
Meanwhile, for fiscal 2022, Endava forecast revenue in the range of £792 million (US$981.7 million) to £794 million (US$984.1 million) and EPS in the range of £2.15 (US$2.66) to £2.16 (US$2.68) per share.
Analysts expect full-year revenue of £804 million (US$996.9 million) and EPS of £2.16 (US$2.68).
This would represent revenue growth of 14.1% and EPS growth of 4.3% compared to the previous financial year’s revenue of £654.8 million (US$873.9 million) and EPS of £1.93 (US$2.57).
Ahead of Endava’s results, analysts at Wedbush trimmed their fiscal 2024 assumptions on the ‘Outperform’ rated stock on continued near-term pressure on discretionary spending given the company’s outsized exposure to the FinTech vertical, European region and private equity-funded companies.
“Our 2024 financial year model now assumes 3% year-over-year reported revenue growth (down from 10%, and the Street's 5% level),” they wrote in a note to clients.
They have a 12-month price target on the stock of US$65.
Endava shares traded lower ahead of its results, down 1.2% at US$51.54 on Monday afternoon.
Contact the author at emily.jarvie@proactiveinvestors.com
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