Why Endava Stock Plummeted This Week

Core Insights - Endava's stock experienced a significant sell-off, dropping 29.5% in a week while the S&P 500 rose 0.1% and the Nasdaq Composite fell 0.5% [1][2] - The decline was triggered by disappointing Q1 results for fiscal 2026, which ended on September 30, leading to a dramatic contraction in the company's valuation [2][3] Financial Performance - In Q1, Endava reported non-GAAP earnings of 0.15 British pounds ($0.20) on sales of 178.2 million pounds ($234.5 million) [3] - Sales declined unexpectedly by 8.7% year over year, or 7.3% on a currency-adjusted basis, with both revenue and earnings per share falling short of prior guidance [3] - Management has lowered full-year performance targets, now guiding for sales between 735 million pounds and 752 million pounds, indicating an annual decline of 3.5% at the midpoint [5] Market Reaction - Following the weak performance, Endava's stock plummeted, reflecting investor concerns about the company's future growth, particularly regarding its artificial intelligence strategies [5]