Endava PLC is downgraded to hold as the anticipated H2 2026 recovery has not materialized and execution remains challenged. Q3 2026 revenue declined 8.4% y/y, with adjusted profit before tax margin dropping to 1.8% from 12.6%, reflecting weak pipeline conversion and profitability. AI-driven business is scaling rapidly, now 15% of revenue with higher margins, but not yet sufficient to offset legacy business weakness.