DAVA gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 88 industry peers in the IT Services industry. While DAVA seems to be doing ok healthwise, there are quite some concerns on its profitability. A decent growth rate in combination with a cheap valuation! Better keep an eye on DAVA.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

DAVA had positive earnings in the past year.
In the past year DAVA had a positive cash flow from operations.
In the past 5 years DAVA has always been profitable.
In the past 5 years DAVA always reported a positive cash flow from operatings.

1.2 Ratios

DAVA has a Return On Assets (1.16%) which is in line with its industry peers.
DAVA's Return On Equity of 1.90% is in line compared to the rest of the industry. DAVA outperforms 54.55% of its industry peers.
Looking at the Return On Invested Capital, with a value of 2.23%, DAVA is in line with its industry, outperforming 53.41% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for DAVA is significantly below the industry average of 29.07%.

		Industry Rank	Sector Rank
ROA	1.16%
ROE	1.9%
ROIC	2.23%

ROA(3y)5.4%

ROA(5y)7.77%

ROE(3y)7.6%

ROE(5y)11.34%

ROIC(3y)5.99%

ROIC(5y)9.17%

1.3 Margins

DAVA has a Profit Margin (1.43%) which is in line with its industry peers.
DAVA's Profit Margin has declined in the last couple of years.
The Operating Margin of DAVA (3.16%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of DAVA has declined.
DAVA has a worse Gross Margin (24.19%) than 72.73% of its industry peers.
DAVA's Gross Margin has declined in the last couple of years.

		Industry Rank	Sector Rank
OM	3.16%
PM (TTM)	1.43%
GM	24.19%

OM growth 3Y-34.74%

OM growth 5Y-9.2%

PM growth 3Y-39.96%

PM growth 5Y-13.58%

GM growth 3Y-8.99%

GM growth 5Y-2.39%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

DAVA has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, DAVA has less shares outstanding
DAVA has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, DAVA has a worse debt to assets ratio.

2.2 Solvency

DAVA has an Altman-Z score of 2.30. This is not the best score and indicates that DAVA is in the grey zone with still only limited risk for bankruptcy at the moment.
DAVA has a Altman-Z score (2.30) which is in line with its industry peers.
The Debt to FCF ratio of DAVA is 4.49, which is a neutral value as it means it would take DAVA, 4.49 years of fcf income to pay off all of its debts.
DAVA's Debt to FCF ratio of 4.49 is in line compared to the rest of the industry. DAVA outperforms 54.55% of its industry peers.
DAVA has a Debt/Equity ratio of 0.40. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.40, DAVA is in line with its industry, outperforming 48.86% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	0.4
Debt/FCF	4.49
Altman-Z	2.3

ROIC/WACC0.3

WACC7.34%

2.3 Liquidity

DAVA has a Current Ratio of 2.18. This indicates that DAVA is financially healthy and has no problem in meeting its short term obligations.
DAVA has a Current ratio of 2.18. This is in the better half of the industry: DAVA outperforms 62.50% of its industry peers.
DAVA has a Quick Ratio of 2.18. This indicates that DAVA is financially healthy and has no problem in meeting its short term obligations.
DAVA has a Quick ratio of 2.18. This is in the better half of the industry: DAVA outperforms 64.77% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	2.18
Quick Ratio	2.18

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has been growing slightly by 3.59% over the past year.
The Earnings Per Share has been growing slightly by 2.54% on average over the past years.
The Revenue has been growing slightly by 1.07% in the past year.
Measured over the past years, DAVA shows a quite strong growth in Revenue. The Revenue has been growing by 17.08% on average per year.

EPS 1Y (TTM)3.59%

EPS 3Y-16.39%

EPS 5Y2.54%

EPS Q2Q%-40.94%

Revenue 1Y (TTM)1.07%

Revenue growth 3Y5.65%

Revenue growth 5Y17.08%

Sales Q2Q%-8.65%

3.2 Future

DAVA is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 3.51% yearly.
DAVA is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.29% yearly.

EPS Next Y-29.59%

EPS Next 2Y-6.86%

EPS Next 3Y-0.24%

EPS Next 5Y3.51%

Revenue Next Year-4.47%

Revenue Next 2Y-0.35%

Revenue Next 3Y1.22%

Revenue Next 5Y1.29%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 4.40, which indicates a rather cheap valuation of DAVA.
Compared to the rest of the industry, the Price/Earnings ratio of DAVA indicates a rather cheap valuation: DAVA is cheaper than 94.32% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 28.41. DAVA is valued rather cheaply when compared to this.
DAVA is valuated cheaply with a Price/Forward Earnings ratio of 4.62.
DAVA's Price/Forward Earnings ratio is rather cheap when compared to the industry. DAVA is cheaper than 95.45% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of DAVA to the average of the S&P500 Index (25.64), we can say DAVA is valued rather cheaply.

		Industry Rank	Sector Rank
PE	4.4
Fwd PE	4.62

4.2 Price Multiples

90.91% of the companies in the same industry are more expensive than DAVA, based on the Enterprise Value to EBITDA ratio.
DAVA's Price/Free Cash Flow ratio is rather cheap when compared to the industry. DAVA is cheaper than 96.59% of the companies in the same industry.