2 Stocks Are Soaring In This Bleak Market

The stock market moved slightly lower on Tuesday, although it finished significantly higher than its lows on the day. Investors continue to worry about what the Federal Reserve might do with interest rates both now and in 2024, and those concerns sent the Nasdaq Composite (IXIC)S&P 500 (GSPC), and Dow Jones Industrial Average (DJI) all down by roughly a quarter percent.

S&P 500(0.22%)(10)

Even though the mood overall was somewhat gloomy, there were some bright spots in the market. Both Endava (DAVA) and Stitch Fix (SFIX) posted gains of 10% or more after reporting their latest financial results. Below, you'll see what made shareholders happy about the reports and what the future could bring for both companies.

Endava expects more digital transformation

Shares of Endava finished higher by 11% on Tuesday. The automation and development-services provider reported results for its fiscal fourth quarter ended June 30, and investors were generally pleased with what the company said about its immediate future prospects.

Endava's quarterly numbers were generally solid. Revenue of 189.8 million British pounds ($235.2 million) was up more than 5% year over year. Adjusted-net income rose 12% from year-ago levels to 32.9 million British pounds ($40.8 million), which worked out to earnings of 57 pence ($.71) per share.

Looking more closely at the company's results, Endava showed some promising signs of sustained growth. The number of clients generating 1 million pounds of revenue ($1,239,300) or more over the past 12 months climbed by a dozen to 146. Yet Endava continued to rely heavily on its best clients, as its top 10 customers accounted for 35% of its total sales for the period.

Endava's guidance for fiscal 2024 reflected an expected tough period for the industry, with the company calling for sales growth of just 1% to 3% and earnings of between 1.52 and 1.62 British pounds per share (between $1.88 and $2.01 per share). Yet with the U.K.-based company having made inroads in its efforts to expand across the globe, shareholders seem to believe that now might be a good time to take a closer look at Endava's stock.

Stitch Fix looks to improve its image

Elsewhere, shares of Stitch Fix climbed 12% on Tuesday. The apparel delivery specialist reported fiscal fourth-quarter financial results for the period ended July 29 that showed ongoing weakness, but the company's new CEO expressed confidence in Stitch Fix's ability to recover.

Stitch Fix's financial numbers weren't pretty. Revenue of $376 million was down 22% year over year. The company lost $28.7 million, or $0.24 per share, and active client counts dropped by nearly half a million over the past 12 months to drop below 3.3 million.

Yet Stitch Fix argued that its quarterly numbers actually came in ahead of its expectations. Even as it looks to exit from its U.K. business, Stitch Fix nevertheless has aimed to strengthen its balance sheet, and the company generated positive free cash flow for the third consecutive quarter.

CEO Matt Baer believes that Stitch Fix can do a lot better than its current numbers suggest. Whether that proves to be the case remains to be seen, but at least today, investors seemed to agree with the new chief executive and express their confidence that Stitch Fix could regain some of its past glory.

Originally published on Fool.com