EPAM SYSTEMS INC (EPAM)
US29414B1044 - Common Stock
Overall EPAM gets a fundamental rating of 6 out of 10. We evaluated EPAM against 86 industry peers in the IT Services industry. EPAM has an excellent financial health rating, but there are some minor concerns on its profitability. EPAM is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year EPAM was profitable.
In the past year EPAM had a positive cash flow from operations.
Each year in the past 5 years EPAM has been profitable.
Each year in the past 5 years EPAM had a positive operating cash flow.
1.2 Ratios
EPAM has a Return On Assets of 9.58%. This is amongst the best in the industry. EPAM outperforms 80.95% of its industry peers.
Looking at the Return On Equity, with a value of 12.02%, EPAM is in the better half of the industry, outperforming 73.81% of the companies in the same industry.
EPAM has a Return On Invested Capital of 11.40%. This is in the better half of the industry: EPAM outperforms 78.57% of its industry peers.
EPAM had an Average Return On Invested Capital over the past 3 years of 13.88%. This is in line with the industry average of 12.84%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.58% | ||
| ROE | 12.02% | ||
| ROIC | 11.4% |
ROA(3y)11.24%
ROA(5y)11.47%
ROE(3y)15.12%
ROE(5y)15.64%
ROIC(3y)13.88%
ROIC(5y)13.64%
1.3 Margins
EPAM has a better Profit Margin (8.89%) than 73.81% of its industry peers.
In the last couple of years the Profit Margin of EPAM has declined.
EPAM has a better Operating Margin (11.24%) than 72.62% of its industry peers.
EPAM's Operating Margin has declined in the last couple of years.
EPAM has a Gross Margin (30.57%) which is comparable to the rest of the industry.
EPAM's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.24% | ||
| PM (TTM) | 8.89% | ||
| GM | 30.57% |
OM growth 3Y-7.63%
OM growth 5Y-3.37%
PM growth 3Y-10.26%
PM growth 5Y-7.37%
GM growth 3Y-4.28%
GM growth 5Y-3%
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.
EPAM has about the same amout of shares outstanding than it did 1 year ago.
EPAM has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, EPAM has an improved debt to assets ratio.
2.2 Solvency
EPAM has an Altman-Z score of 12.32. This indicates that EPAM is financially healthy and has little risk of bankruptcy at the moment.
EPAM's Altman-Z score of 12.32 is amongst the best of the industry. EPAM outperforms 98.81% of its industry peers.
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.
EPAM's Debt to FCF ratio of 0.05 is amongst the best of the industry. EPAM outperforms 94.05% 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.
With an excellent Debt to Equity ratio value of 0.01, EPAM belongs to the best of the industry, outperforming 84.52% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.05 | ||
| Altman-Z | 12.32 |
ROIC/WACC1.03
WACC11.07%
2.3 Liquidity
EPAM has a Current Ratio of 4.79. This indicates that EPAM is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of EPAM (4.79) is better than 92.86% of its industry peers.
A Quick Ratio of 4.79 indicates that EPAM has no problem at all paying its short term obligations.
Looking at the Quick ratio, with a value of 4.79, EPAM belongs to the top of the industry, outperforming 92.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.79 | ||
| Quick Ratio | 4.79 |
3. Growth
3.1 Past
EPAM shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.84%.
Measured over the past years, EPAM shows a quite strong growth in Earnings Per Share. The EPS has been growing by 19.31% on average per year.
EPAM shows a decrease in Revenue. In the last year, the revenue decreased by -2.78%.
EPAM shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 20.54% yearly.
EPS 1Y (TTM)-2.84%
EPS 3Y18.59%
EPS 5Y19.31%
EPS growth Q2Q-6.14%
Revenue 1Y (TTM)-2.78%
Revenue growth 3Y20.82%
Revenue growth 5Y20.54%
Revenue growth Q2Q-6.01%
3.2 Future
The Earnings Per Share is expected to grow by 15.80% on average over the next years. This is quite good.
The Revenue is expected to grow by 8.62% on average over the next years. This is quite good.
EPS Next Y-1.5%
EPS Next 2Y7.55%
EPS Next 3Y10.84%
EPS Next 5Y15.8%
Revenue Next Year3.49%
Revenue Next 2Y8.61%
Revenue Next 3Y11.27%
Revenue Next 5Y8.62%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
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 22.45, which indicates a rather expensive current valuation of EPAM.
EPAM's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 24.84, EPAM is valued at the same level.
A Price/Forward Earnings ratio of 22.79 indicates a rather expensive valuation of EPAM.
EPAM's Price/Forward Earnings ratio is in line with the industry average.
EPAM's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.45 | ||
| Fwd PE | 22.79 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as EPAM.
EPAM's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.74 | ||
| EV/EBITDA | 18.77 |
4.3 Compensation for Growth
The decent profitability rating of EPAM may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.16
EPS Next 2Y7.55%
EPS Next 3Y10.84%
5. Dividend
5.1 Amount
No dividends for EPAM!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
EPAM SYSTEMS INC
NYSE:EPAM (4/26/2024, 7:04:00 PM)
After market: 237.75 0 (0%)237.75
+0.62 (+0.26%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap13.75B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
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Surprises & Revisions
EPS beat(2)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
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EPS NY rev (3m)
Revenue NQ rev (1m)
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Revenue NY rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.45 | ||
| Fwd PE | 22.79 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)1.16
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.58% | ||
| ROE | 12.02% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 11.24% | ||
| PM (TTM) | 8.89% | ||
| GM | 30.57% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.08
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 4.79 | ||
| Quick Ratio | 4.79 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-2.84%
EPS 3Y18.59%
EPS 5Y
EPS growth Q2Q
EPS Next Y-1.5%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-2.78%
Revenue growth 3Y20.82%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y