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EPAM Systems Inc EPAM

Morningstar Rating
$307.92 +1.09 (0.36%)
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Company Report

EPAM Starts to Turn the Corner in the Fourth Quarter, Revenue Growth Coming Back

Narrow-moat-rated EPAM reported solid fourth-quarter earnings, with a slight beat on revenue, 2% higher than both our own estimates and FactSet consensus, while adjusted EPS came in 9% above consensus and 8% above our own estimates. While near-term results were ahead of expectations, EPAM’s outlook for 2024 was mixed. As we push out the eventual recovery in revenue growth and margins that we still expect for EPAM—while also balancing that with some other adjustments to our projections, including slightly lower investment spending to achieve that growth—we are raising our fair value estimate to $234 per share from $222. We still view shares as overvalued.

Price vs Fair Value

EPAM is trading at a 32% premium.
Price
$307.92
Fair Value
$237.00
Uncertainty
Medium
1-Star Price
$447.60
5-Star Price
$243.10
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

EPAM could experience even more significant top-line reacceleration than expected as the global economy sees a quick rebound from macroeconomic weakness.

Bears

The firm could experience steeper wage inflation than expected, like in Ukraine, compressing gross margins significantly.

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News

Trading Information

Previous Close Price
$306.83
Day Range
$307.11314.83
52-Week Range
$197.99315.32
Bid/Ask
$306.00 / $315.00
Market Cap
$17.81 Bil
Volume/Avg
421,712 / 481,104

Key Statistics

Price/Earnings (Normalized)
28.59
Price/Sales
3.88
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield
0.93%

Company Profile

EPAM Systems is a global IT services firm that offers platform engineering, software development, and consulting services. EPAM’s largest market is North America, which represents approximately 60% of revenues. Offerings span assisting companies with new technologies, such as artificial intelligence, virtual reality, and robotics.
Sector
Technology
Industry
Information Technology Services
Stock Style Box
Mid Core
Total Number of Employees
53,150

Competitors

Valuation

Metric
EPAM
CTSH
ACN
Price/Earnings (Normalized)
28.5917.3832.35
Price/Book Value
5.132.989.97
Price/Sales
3.882.063.79
Price/Cash Flow
26.4515.8522.64
Price/Earnings
EPAM
CTSH
ACN

Financial Strength

Metric
EPAM
CTSH
ACN
Quick Ratio
4.641.951.18
Current Ratio
4.792.251.33
Interest Coverage
65.90162.06
Quick Ratio
EPAM
CTSH
ACN

Profitability

Metric
EPAM
CTSH
ACN
Return on Assets (Normalized)
15.12%13.44%17.12%
Return on Equity (Normalized)
19.35%19.02%37.32%
Return on Invested Capital (Normalized)
17.16%16.62%28.70%
Return on Assets
EPAM
CTSH
ACN
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Information Technology Services Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
ACN
Accenture PLC Class ACgzvw$240.6 Bil
IBM
International Business Machines CorpQjlzs$177.0 Bil
FI
Fiserv IncSlbql$88.6 Bil
INFY
Infosys Ltd ADRKrgzh$81.8 Bil
FIS
Fidelity National Information Services IncTtjlyf$40.0 Bil
CTSH
Cognizant Technology Solutions Corp Class AQyshl$39.4 Bil
WIT
Wipro Ltd ADRSswhzw$32.8 Bil
GIB
CGI Inc Class AGvmrwl$27.1 Bil
BR
Broadridge Financial Solutions IncHgqgftb$24.2 Bil

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