Analyzing Grid Dynamics (NASDAQ:GDYN) and Endava (NYSE:DAVA)

Grid Dynamics (NASDAQ:GDYN) and Endava (NYSE:DAVA) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, risk, analyst recommendations and valuation.

Risk and Volatility

Grid Dynamics has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500. Comparatively, Endava has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Grid Dynamics and Endava, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Grid Dynamics	2	2	4	0	2.25
Endava	3	4	2	0	1.89

Grid Dynamics currently has a consensus target price of $9.40, suggesting a potential upside of 19.59%. Endava has a consensus target price of $7.43, suggesting a potential upside of 111.82%. Given Endava’s higher probable upside, analysts clearly believe Endava is more favorable than Grid Dynamics.

Institutional & Insider Ownership

71.2% of Grid Dynamics shares are owned by institutional investors. Comparatively, 62.2% of Endava shares are owned by institutional investors. 6.5% of Grid Dynamics shares are owned by company insiders. Comparatively, 18.8% of Endava shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Grid Dynamics and Endava”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Grid Dynamics	$411.83 million	1.60	$9.67 million	$0.05	157.20
Endava	$999.23 million	0.20	$27.45 million	($10.51)	-0.33

Endava has higher revenue and earnings than Grid Dynamics. Endava is trading at a lower price-to-earnings ratio than Grid Dynamics, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Grid Dynamics and Endava’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Grid Dynamics	1.27%	1.20%	1.05%
Endava	-57.01%	2.58%	1.45%

About Grid Dynamics

Grid Dynamics Holdings, Inc., together with its subsidiaries, provides technology consulting, platform and product engineering, and analytics services in North America, Europe, and internationally. It offers cloud platform and product engineering services, such as architecting, designing, and building scalable and secure cloud-based platforms and business applications; and AI/machine learning and data platform engineering services that build platforms to facilitate batch and streaming data ingestion, quality governance, orchestration, semantic modeling, observability, and analysis at scale. The company provides digital engagement services, including digital ecosystem design and implementation; and supply chain, Internet of Thing, and advanced manufacturing, which focuses on transforming traditional operations into smart and connected ecosystems. It serves customers that operate in the tech, media, telecommunications, retail, consumer packaged goods, manufacturing, and finance industries. The company was formerly known as ChaSerg Technology Acquisition Corp. and changed its name to Grid Dynamics Holdings, Inc. Grid Dynamics Holdings, Inc. was founded in 2006 and is headquartered in San Ramon, California.

About Endava

Endava plc provides technology services for clients in the consumer products, healthcare, mobility, and retail verticals in North America, Europe, the United Kingdom, and internationally. It offers ideation and production services in the payments and financial services, telecommunications, media, and technology verticals; and business analysis, data analytics, program management, digital product strategy, private equity value enhancement, IT strategy, architecture, extended reality, machine learning and artificial intelligence, product design, and user experience and visual design services. The company also provides automated testing, cloud native software engineering, continuous delivery, distributed agile delivery, intelligent automation, secure development, agile applications management, cloud infrastructure, DevSecOps, service delivery, smart desk, telemetry and monitoring, organizational optimization, and transaction advisory services. Endava plc was founded in 2000 and is headquartered in London, the United Kingdom.