EPAM SYSTEMS INC (EPAM) Stock Fundamental Analysis
USA - NYSE:EPAM - US29414B1044 - Common Stock
180.16 USD
-2.24 (-1.23%)
180.16 USD
0 (0%)
Overall EPAM gets a fundamental rating of 6 out of 10. We evaluated EPAM against 84 industry peers in the IT Services industry. EPAM has an excellent financial health rating, but there are some minor concerns on its profitability. EPAM has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
EPAM had positive earnings in the past year.
EPAM had a positive operating cash flow in the past year.
Each year in the past 5 years EPAM has been profitable.
In the past 5 years EPAM always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of EPAM (7.67%) is better than 77.38% of its industry peers.
EPAM has a better Return On Equity (9.97%) than 64.29% of its industry peers.
EPAM's Return On Invested Capital of 10.71% is fine compared to the rest of the industry. EPAM outperforms 75.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for EPAM is significantly below the industry average of 28.66%.
| 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)11.98%
ROIC(5y)12.84%
1.3 Margins
EPAM's Profit Margin of 7.01% is fine compared to the rest of the industry. EPAM outperforms 71.43% of its industry peers.
In the last couple of years the Profit Margin of EPAM has declined.
With a decent Operating Margin value of 10.43%, EPAM is doing good in the industry, outperforming 70.24% of the companies in the same industry.
EPAM's Operating Margin has declined in the last couple of years.
EPAM's Gross Margin of 28.92% is on the low side compared to the rest of the industry. EPAM is outperformed by 63.10% of its industry peers.
EPAM's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.43% | ||
| PM (TTM) | 7.01% | ||
| GM | 28.92% |
OM growth 3Y-7.24%
OM growth 5Y-2.7%
PM growth 3Y-9.14%
PM growth 5Y-3.32%
GM growth 3Y-3.28%
GM growth 5Y-2.67%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), EPAM is creating some value.
The number of shares outstanding for EPAM has been reduced compared to 1 year ago.
EPAM has more shares outstanding than it did 5 years ago.
The debt/assets ratio for EPAM has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 8.03 indicates that EPAM is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 8.03, EPAM belongs to the best of the industry, outperforming 85.71% of the companies in the same industry.
The Debt to FCF ratio of EPAM is 0.05, which is an excellent value as it means it would take EPAM, 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, EPAM belongs to the top of the industry, outperforming 94.05% of the companies in the same industry.
A Debt/Equity ratio of 0.01 indicates that EPAM is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.01, EPAM belongs to the top of the industry, outperforming 80.95% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.05 | ||
| Altman-Z | 8.03 |
ROIC/WACC1.21
WACC8.84%
2.3 Liquidity
A Current Ratio of 3.02 indicates that EPAM has no problem at all paying its short term obligations.
The Current ratio of EPAM (3.02) is better than 80.95% of its industry peers.
EPAM has a Quick Ratio of 3.02. This indicates that EPAM is financially healthy and has no problem in meeting its short term obligations.
EPAM has a Quick ratio of 3.02. This is amongst the best in the industry. EPAM outperforms 80.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.02 | ||
| Quick Ratio | 3.02 |
3. Growth
3.1 Past
EPAM shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.97%.
Measured over the past years, EPAM shows a quite strong growth in Earnings Per Share. The EPS has been growing by 14.89% on average per year.
Looking at the last year, EPAM shows a quite strong growth in Revenue. The Revenue has grown by 14.26% in the last year.
EPAM 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
The Earnings Per Share is expected to grow by 4.56% on average over the next years.
EPAM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.65% yearly.
EPS Next Y4.42%
EPS Next 2Y6.78%
EPS Next 3Y8.14%
EPS Next 5Y4.56%
Revenue Next Year15.23%
Revenue Next 2Y11.14%
Revenue Next 3Y10.23%
Revenue Next 5Y7.65%
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.
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.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 16.23, which indicates a correct valuation of EPAM.
EPAM's Price/Earnings ratio is a bit cheaper when compared to the industry. EPAM is cheaper than 72.62% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.35. EPAM is valued slightly cheaper when compared to this.
With a Price/Forward Earnings ratio of 14.54, EPAM is valued correctly.
76.19% of the companies in the same industry are more expensive than EPAM, based on the Price/Forward Earnings ratio.
EPAM is valuated cheaply when we compare the Price/Forward Earnings ratio to 33.72, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.23 | ||
| Fwd PE | 14.54 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, EPAM is valued a bit cheaper than 65.48% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of EPAM indicates a somewhat cheap valuation: EPAM is cheaper than 61.90% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.86 | ||
| EV/EBITDA | 13.87 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates EPAM does not grow enough to justify the current Price/Earnings ratio.
PEG (NY)3.67
PEG (5Y)1.09
EPS Next 2Y6.78%
EPS Next 3Y8.14%
5. Dividend
5.1 Amount
No dividends for EPAM!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
180.16
-2.24 (-1.23%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners96.48%
Inst Owner Change-0.36%
Ins Owners3.6%
Ins Owner Change0.07%
Market Cap10.03B
Revenue(TTM)5.30B
Net Income(TTM)371.62M
Analysts80
Price Target209.37 (16.21%)
Short Float %3.68%
Short Ratio2.64
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.91%
Min EPS beat(2)-0.24%
Max EPS beat(2)4.07%
EPS beat(4)3
Avg EPS beat(4)2.22%
Min EPS beat(4)-0.24%
Max EPS beat(4)4.07%
EPS beat(8)7
Avg EPS beat(8)5.06%
EPS beat(12)11
Avg EPS beat(12)5.54%
EPS beat(16)15
Avg EPS beat(16)10.49%
Revenue beat(2)0
Avg Revenue beat(2)-0.55%
Min Revenue beat(2)-0.61%
Max Revenue beat(2)-0.48%
Revenue beat(4)1
Avg Revenue beat(4)-0.2%
Min Revenue beat(4)-0.61%
Max Revenue beat(4)0.84%
Revenue beat(8)1
Avg Revenue beat(8)-0.58%
Revenue beat(12)1
Avg Revenue beat(12)-0.88%
Revenue beat(16)4
Avg Revenue beat(16)0.18%
PT rev (1m)-4%
PT rev (3m)-5.59%
EPS NQ rev (1m)0%
EPS NQ rev (3m)4.78%
EPS NY rev (1m)0.5%
EPS NY rev (3m)2.62%
Revenue NQ rev (1m)0.07%
Revenue NQ rev (3m)1.67%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)0.88%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.23 | ||
| Fwd PE | 14.54 | ||
| P/S | 1.89 | ||
| P/FCF | 21.86 | ||
| P/OCF | 19.98 | ||
| P/B | 2.69 | ||
| P/tB | 4.78 | ||
| EV/EBITDA | 13.87 |
EPS(TTM)11.1
EY6.16%
EPS(NY)12.39
Fwd EY6.88%
FCF(TTM)8.24
FCFY4.58%
OCF(TTM)9.02
OCFY5.01%
SpS95.11
BVpS66.9
TBVpS37.66
PEG (NY)3.67
PEG (5Y)1.09
Graham Number129.26
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.67% | ||
| ROE | 9.97% | ||
| ROCE | 13.78% | ||
| ROIC | 10.72% | ||
| ROICexc | 15.51% | ||
| ROICexgc | 37.67% | ||
| OM | 10.43% | ||
| PM (TTM) | 7.01% | ||
| GM | 28.92% | ||
| FCFM | 8.67% |
ROA(3y)9.87%
ROA(5y)11.06%
ROE(3y)12.84%
ROE(5y)14.88%
ROIC(3y)11.98%
ROIC(5y)12.84%
ROICexc(3y)23.91%
ROICexc(5y)27.45%
ROICexgc(3y)44.54%
ROICexgc(5y)48.5%
ROCE(3y)15.42%
ROCE(5y)16.54%
ROICexgc growth 3Y-11.88%
ROICexgc growth 5Y3.29%
ROICexc growth 3Y-20.35%
ROICexc growth 5Y-8.92%
OM growth 3Y-7.24%
OM growth 5Y-2.7%
PM growth 3Y-9.14%
PM growth 5Y-3.32%
GM growth 3Y-3.28%
GM growth 5Y-2.67%
F-Score6
Asset Turnover1.09
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.05 | ||
| Debt/EBITDA | 0.04 | ||
| Cap/Depr | 46.68% | ||
| Cap/Sales | 0.82% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 77.89% | ||
| Profit Quality | 123.54% | ||
| Current Ratio | 3.02 | ||
| Quick Ratio | 3.02 | ||
| Altman-Z | 8.03 |
F-Score6
WACC8.84%
ROIC/WACC1.21
Cap/Depr(3y)51.75%
Cap/Depr(5y)79.67%
Cap/Sales(3y)0.99%
Cap/Sales(5y)1.71%
Profit Quality(3y)111.75%
Profit Quality(5y)115.25%
High Growth Momentum
Growth
EPS 1Y (TTM)2.97%
EPS 3Y6.34%
EPS 5Y14.89%
EPS Q2Q%-1.28%
EPS Next Y4.42%
EPS Next 2Y6.78%
EPS Next 3Y8.14%
EPS Next 5Y4.56%
Revenue 1Y (TTM)14.26%
Revenue growth 3Y7.95%
Revenue growth 5Y15.56%
Sales Q2Q%19.43%
Revenue Next Year15.23%
Revenue Next 2Y11.14%
Revenue Next 3Y10.23%
Revenue Next 5Y7.65%
EBIT growth 1Y3.34%
EBIT growth 3Y0.14%
EBIT growth 5Y12.45%
EBIT Next Year16.3%
EBIT Next 3Y12.45%
EBIT Next 5Y11.07%
FCF growth 1Y-14.58%
FCF growth 3Y4.58%
FCF growth 5Y22.87%
OCF growth 1Y-13.01%
OCF growth 3Y-0.77%
OCF growth 5Y14.23%
EPAM SYSTEMS INC / EPAM FAQ
What is the fundamental rating for EPAM stock?
ChartMill assigns a fundamental rating of 6 / 10 to EPAM.
What is the valuation status of EPAM SYSTEMS INC (EPAM) stock?
ChartMill assigns a valuation rating of 5 / 10 to EPAM SYSTEMS INC (EPAM). This can be considered as Fairly Valued.
What is the profitability of EPAM stock?
EPAM SYSTEMS INC (EPAM) has a profitability rating of 5 / 10.
Can you provide the expected EPS growth for EPAM stock?
The Earnings per Share (EPS) of EPAM SYSTEMS INC (EPAM) is expected to grow by 4.42% in the next year.