EPAM SYSTEMS INC (1EPAM.MI) Stock Fundamental Analysis

Europe - Euronext Milan - BIT:1EPAM - US29414B1044 - Common Stock

183.2 EUR

+4.8 (+2.69%)

Last: 1/21/2026, 7:00:00 PM

Fundamental Rating

1EPAM gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 70 industry peers in the IT Services industry. 1EPAM has an excellent financial health rating, but there are some minor concerns on its profitability. While showing a medium growth rate, 1EPAM is valued expensive at the moment.

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1. Profitability

1.1 Basic Checks

In the past year 1EPAM was profitable.
1EPAM had a positive operating cash flow in the past year.
1EPAM had positive earnings in each of the past 5 years.
Each year in the past 5 years 1EPAM had a positive operating cash flow.

1.2 Ratios

1EPAM has a better Return On Assets (7.67%) than 77.14% of its industry peers.
1EPAM has a Return On Equity (9.97%) which is comparable to the rest of the industry.
Looking at the Return On Invested Capital, with a value of 10.71%, 1EPAM is in the better half of the industry, outperforming 62.86% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for 1EPAM is significantly below the industry average of 26.75%.

		Industry Rank	Sector Rank
ROA	7.67%
ROE	9.97%
ROIC	10.72%

ROA(3y)9.87%

ROA(5y)11.06%

ROE(3y)12.84%

ROE(5y)14.88%

ROIC(3y)11.99%

ROIC(5y)12.85%

1.3 Margins

Looking at the Profit Margin, with a value of 7.01%, 1EPAM is in the better half of the industry, outperforming 74.29% of the companies in the same industry.
In the last couple of years the Profit Margin of 1EPAM has declined.
1EPAM has a Operating Margin of 10.43%. This is in the better half of the industry: 1EPAM outperforms 71.43% of its industry peers.
1EPAM's Operating Margin has declined in the last couple of years.
With a Gross Margin value of 28.92%, 1EPAM is not doing good in the industry: 72.86% of the companies in the same industry are doing better.
In the last couple of years the Gross Margin of 1EPAM has declined.

		Industry Rank	Sector Rank
OM	10.43%
PM (TTM)	7.01%
GM	28.92%

OM growth 3Y-7.14%

OM growth 5Y-2.63%

PM growth 3Y-9.14%

PM growth 5Y-3.32%

GM growth 3Y-3.28%

GM growth 5Y-2.67%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so 1EPAM is still creating some value.
1EPAM has less shares outstanding than it did 1 year ago.
1EPAM has more shares outstanding than it did 5 years ago.
1EPAM has a better debt/assets ratio than last year.

2.2 Solvency

1EPAM has an Altman-Z score of 9.06. This indicates that 1EPAM is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 9.06, 1EPAM belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
The Debt to FCF ratio of 1EPAM is 0.05, which is an excellent value as it means it would take 1EPAM, only 0.05 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.05, 1EPAM belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
A Debt/Equity ratio of 0.01 indicates that 1EPAM is not too dependend on debt financing.
With an excellent Debt to Equity ratio value of 0.01, 1EPAM belongs to the best of the industry, outperforming 98.57% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	0.01
Debt/FCF	0.05
Altman-Z	9.06

ROIC/WACC1.16

WACC9.2%

2.3 Liquidity

A Current Ratio of 3.02 indicates that 1EPAM has no problem at all paying its short term obligations.
1EPAM has a better Current ratio (3.02) than 98.57% of its industry peers.
A Quick Ratio of 3.02 indicates that 1EPAM has no problem at all paying its short term obligations.
1EPAM has a better Quick ratio (3.02) than 100.00% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	3.02
Quick Ratio	3.02

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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 2.97% over the past year.
The Earnings Per Share has been growing by 14.89% on average over the past years. This is quite good.
The Revenue has grown by 14.26% in the past year. This is quite good.
1EPAM shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 15.56% yearly.

EPS 1Y (TTM)2.97%

EPS 3Y6.34%

EPS 5Y14.89%

EPS Q2Q%-1.28%

Revenue 1Y (TTM)14.26%

Revenue growth 3Y7.95%

Revenue growth 5Y15.56%

Sales Q2Q%19.43%

3.2 Future

Based on estimates for the next years, 1EPAM will show a small growth in Earnings Per Share. The EPS will grow by 5.17% on average per year.
Based on estimates for the next years, 1EPAM will show a small growth in Revenue. The Revenue will grow by 7.81% on average per year.

EPS Next Y7.22%

EPS Next 2Y8.1%

EPS Next 3Y9.19%

EPS Next 5Y5.17%

Revenue Next Year15.96%

Revenue Next 2Y11.41%

Revenue Next 3Y10.52%

Revenue Next 5Y7.81%

3.3 Evolution

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

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 19.68, 1EPAM is valued on the expensive side.
The rest of the industry has a similar Price/Earnings ratio as 1EPAM.
1EPAM is valuated rather cheaply when we compare the Price/Earnings ratio to 28.82, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 17.21, which indicates a rather expensive current valuation of 1EPAM.
1EPAM's Price/Forward Earnings ratio is in line with the industry average.
1EPAM's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.95.

		Industry Rank	Sector Rank
PE	19.68
Fwd PE	17.21

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, 1EPAM is valued a bit more expensive than 72.86% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, 1EPAM is valued a bit more expensive than the industry average as 64.29% of the companies are valued more cheaply.

		Industry Rank	Sector Rank
P/FCF	26.29
EV/EBITDA	16.84

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates 1EPAM does not grow enough to justify the current Price/Earnings ratio.