One of the biggest stories of last week was how Endava plc (NYSE:DAVA) shares plunged 24% in the week since its latest quarterly results, closing yesterday at US$26.02. Revenues were UK£196m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at UK£0.11, an impressive 42% ahead of estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Endava

After the latest results, the twelve analysts covering Endava are now predicting revenues of UK£797.1m in 2025. If met, this would reflect an okay 5.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 321% to UK£0.39. Before this earnings report, the analysts had been forecasting revenues of UK£805.1m and earnings per share (EPS) of UK£0.40 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$37.73, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Endava at US$49.98 per share, while the most bearish prices it at US$30.03. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Endava's past performance and to peers in the same industry. We would highlight that Endava's revenue growth is expected to slow, with the forecast 10% annualised growth rate until the end of 2025 being well below the historical 18% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 9.5% annually. So it's pretty clear that, while Endava's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Endava. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$37.73, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Endava. Long-term earnings power is much more important than next year's profits. We have forecasts for Endava going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Endava that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.