EPAM SYSTEMS INC (EPAM) Stock Fundamental Analysis
NYSE:EPAM - New York Stock Exchange, Inc. - US29414B1044 - Common Stock - Currency: USD
Overall EPAM gets a fundamental rating of 6 out of 10. We evaluated EPAM against 82 industry peers in the IT Services industry. EPAM is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. EPAM has a correct valuation and a medium growth rate.
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.
EPAM had positive earnings in each of the past 5 years.
In the past 5 years EPAM always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 8.72%, EPAM is in the better half of the industry, outperforming 78.05% of the companies in the same industry.
EPAM has a better Return On Equity (11.30%) than 65.85% of its industry peers.
EPAM's Return On Invested Capital of 10.61% is fine compared to the rest of the industry. EPAM outperforms 73.17% of its industry peers.
EPAM had an Average Return On Invested Capital over the past 3 years of 11.98%. This is significantly below the industry average of 21.60%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.72% | ||
| ROE | 11.3% | ||
| ROIC | 10.61% |
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
The Profit Margin of EPAM (8.47%) is better than 75.61% of its industry peers.
In the last couple of years the Profit Margin of EPAM has declined.
EPAM's Operating Margin of 11.03% is fine compared to the rest of the industry. EPAM outperforms 69.51% of its industry peers.
In the last couple of years the Operating Margin of EPAM has declined.
EPAM has a Gross Margin of 30.20%. This is in the lower half of the industry: EPAM underperforms 62.20% of its industry peers.
EPAM's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.03% | ||
| PM (TTM) | 8.47% | ||
| GM | 30.2% |
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
EPAM has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for EPAM has been reduced compared to 1 year ago.
Compared to 5 years ago, EPAM has more shares outstanding
The debt/assets ratio for EPAM has been reduced compared to a year ago.
2.2 Solvency
EPAM has an Altman-Z score of 7.72. This indicates that EPAM is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 7.72, EPAM belongs to the top of the industry, outperforming 85.37% of the companies in the same industry.
The Debt to FCF ratio of EPAM is 0.06, which is an excellent value as it means it would take EPAM, only 0.06 years of fcf income to pay off all of its debts.
EPAM has a better Debt to FCF ratio (0.06) than 96.34% of its industry peers.
EPAM has a Debt/Equity ratio of 0.01. This is a healthy value indicating a solid balance between debt and equity.
EPAM's Debt to Equity ratio of 0.01 is amongst the best of the industry. EPAM outperforms 84.15% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.06 | ||
| Altman-Z | 7.72 |
ROIC/WACC1.13
WACC9.42%
2.3 Liquidity
A Current Ratio of 3.06 indicates that EPAM has no problem at all paying its short term obligations.
EPAM has a Current ratio of 3.06. This is amongst the best in the industry. EPAM outperforms 82.93% of its industry peers.
A Quick Ratio of 3.06 indicates that EPAM has no problem at all paying its short term obligations.
The Quick ratio of EPAM (3.06) is better than 82.93% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.06 | ||
| Quick Ratio | 3.06 |
3. Growth
3.1 Past
EPAM shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.27%.
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.
EPAM shows a small growth in Revenue. In the last year, the Revenue has grown by 4.72%.
Measured over the past years, EPAM shows a quite strong growth in Revenue. The Revenue has been growing by 15.56% on average per year.
EPS 1Y (TTM)2.27%
EPS 3Y6.34%
EPS 5Y14.89%
EPS Q2Q%-2.03%
Revenue 1Y (TTM)4.72%
Revenue growth 3Y7.95%
Revenue growth 5Y15.56%
Sales Q2Q%11.69%
3.2 Future
Based on estimates for the next years, EPAM will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.60% on average per year.
The Revenue is expected to grow by 8.01% on average over the next years. This is quite good.
EPS Next Y1.76%
EPS Next 2Y6.47%
EPS Next 3Y8.27%
EPS Next 5Y8.6%
Revenue Next Year14.12%
Revenue Next 2Y10.7%
Revenue Next 3Y10.43%
Revenue Next 5Y8.01%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 15.13, which indicates a correct valuation of EPAM.
Based on the Price/Earnings ratio, EPAM is valued a bit cheaper than the industry average as 75.61% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.48. EPAM is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 13.29, which indicates a correct valuation of EPAM.
Compared to the rest of the industry, the Price/Forward Earnings ratio of EPAM indicates a somewhat cheap valuation: EPAM is cheaper than 78.05% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.52, EPAM is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.13 | ||
| Fwd PE | 13.29 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, EPAM is valued a bit cheaper than 70.73% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of EPAM is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.16 | ||
| EV/EBITDA | 12.85 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PEG (NY)8.59
PEG (5Y)1.02
EPS Next 2Y6.47%
EPS Next 3Y8.27%
5. Dividend
5.1 Amount
No dividends for EPAM!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NYSE:EPAM (7/18/2025, 12:58:00 PM)
163.76
-0.72 (-0.44%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners94.99%
Inst Owner Change-0.01%
Ins Owners3.54%
Ins Owner Change1.93%
Market Cap9.28B
Analysts79.2
Price Target223.34 (36.38%)
Short Float %3.32%
Short Ratio2.19
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)2
Avg EPS beat(2)2.52%
Min EPS beat(2)1.07%
Max EPS beat(2)3.97%
EPS beat(4)4
Avg EPS beat(4)6.18%
Min EPS beat(4)1.07%
Max EPS beat(4)13.33%
EPS beat(8)8
Avg EPS beat(8)6.49%
EPS beat(12)12
Avg EPS beat(12)9.86%
EPS beat(16)16
Avg EPS beat(16)10.91%
Revenue beat(2)1
Avg Revenue beat(2)0.14%
Min Revenue beat(2)-0.56%
Max Revenue beat(2)0.84%
Revenue beat(4)1
Avg Revenue beat(4)-0.44%
Min Revenue beat(4)-1.41%
Max Revenue beat(4)0.84%
Revenue beat(8)1
Avg Revenue beat(8)-0.76%
Revenue beat(12)3
Avg Revenue beat(12)-0.34%
Revenue beat(16)6
Avg Revenue beat(16)0.3%
PT rev (1m)0.68%
PT rev (3m)-14.73%
EPS NQ rev (1m)0.03%
EPS NQ rev (3m)3.34%
EPS NY rev (1m)0.26%
EPS NY rev (3m)1.8%
Revenue NQ rev (1m)0.07%
Revenue NQ rev (3m)2.33%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)1.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.13 | ||
| Fwd PE | 13.29 | ||
| P/S | 1.91 | ||
| P/FCF | 22.16 | ||
| P/OCF | 20.46 | ||
| P/B | 2.55 | ||
| P/tB | 4.57 | ||
| EV/EBITDA | 12.85 |
EPS(TTM)10.82
EY6.61%
EPS(NY)12.32
Fwd EY7.52%
FCF(TTM)7.39
FCFY4.51%
OCF(TTM)8
OCFY4.89%
SpS85.86
BVpS64.3
TBVpS35.81
PEG (NY)8.59
PEG (5Y)1.02
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.72% | ||
| ROE | 11.3% | ||
| ROCE | 13.64% | ||
| ROIC | 10.61% | ||
| ROICexc | 15.11% | ||
| ROICexgc | 36.37% | ||
| OM | 11.03% | ||
| PM (TTM) | 8.47% | ||
| GM | 30.2% | ||
| FCFM | 8.61% |
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%
ROICexcg growth 3Y-11.88%
ROICexcg 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-Score5
Asset Turnover1.03
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.06 | ||
| Debt/EBITDA | 0.04 | ||
| Cap/Depr | 35.13% | ||
| Cap/Sales | 0.71% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 71.35% | ||
| Profit Quality | 101.68% | ||
| Current Ratio | 3.06 | ||
| Quick Ratio | 3.06 | ||
| Altman-Z | 7.72 |
F-Score5
WACC9.42%
ROIC/WACC1.13
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)2.27%
EPS 3Y6.34%
EPS 5Y14.89%
EPS Q2Q%-2.03%
EPS Next Y1.76%
EPS Next 2Y6.47%
EPS Next 3Y8.27%
EPS Next 5Y8.6%
Revenue 1Y (TTM)4.72%
Revenue growth 3Y7.95%
Revenue growth 5Y15.56%
Sales Q2Q%11.69%
Revenue Next Year14.12%
Revenue Next 2Y10.7%
Revenue Next 3Y10.43%
Revenue Next 5Y8.01%
EBIT growth 1Y3.23%
EBIT growth 3Y0.14%
EBIT growth 5Y12.45%
EBIT Next Year14.2%
EBIT Next 3Y13.1%
EBIT Next 5Y11.07%
FCF growth 1Y-22.03%
FCF growth 3Y4.58%
FCF growth 5Y22.87%
OCF growth 1Y-24.83%
OCF growth 3Y-0.77%
OCF growth 5Y14.23%