Endava Shares: A Deepening Downturn with No Clear Bottom?

Endava US29260V1052

The once-promising IT services provider Endava finds itself locked in a seemingly relentless downward spiral. A major investor has nearly exited its position, and Wall Street analysts are slashing their price targets in unison. What is driving this former market favorite into an increasingly deep trough?

The sustained sell-off is grounded in concrete operational challenges. For its first quarter of fiscal 2026, Endava reported disappointing figures: revenue contracted by 8.7%, missing market expectations. In response, management revised its full-year guidance downward, now anticipating an overall revenue decline. These fundamental issues are the primary catalyst, prompting investor flight and prompting analysts to drastically reassess their outlooks.

A Stark Divergence in Institutional Sentiment

Recent data highlights a significant erosion of confidence among major investors. In a striking move, investment firm Grandeur Peak Global Advisors LLC liquidated nearly its entire stake in Endava during the second quarter, selling 91.5% of its holdings. While the broader institutional holding percentage remains around 62%, the near-complete exit by an active fund manager serves as a potent warning signal. The strategies of large players are diverging, with other firms like Kayne Anderson Rudnick taking the opposite tack and adding to their positions during the period.

Wall Street's Pessimistic Reassessment

The gloomy atmosphere is compounded by a wave of severe price target reductions from major financial institutions. Although the consensus rating still stands at "Hold," the recent adjustments paint a bleak picture. Needham cut its target to $9.00, JPMorgan lowered theirs to $10.00, and Morgan Stanley issued a notably bearish target of just $8.00. While these figures still suggest some potential upside from the current trading level, they indicate that analysts see very limited room for a recovery—a far cry from the historical average target of $16.43.

The confluence of fleeing capital, pessimistic analyst commentary, and deteriorating sales metrics currently tells a clear story. The critical question for investors is whether Endava can engineer a turnaround or if the current decline is merely the beginning of a longer journey downward.