EPAM SYSTEMS INC (EPAM)
US29414B1044 - Common Stock
Taking everything into account, EPAM scores 6 out of 10 in our fundamental rating. EPAM was compared to 84 industry peers in the IT Services industry. While EPAM has a great health rating, its profitability is only average at the moment. EPAM has a decent growth rate and is not valued too expensively.
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.
In the past 5 years EPAM always reported a positive cash flow from operatings.
1.2 Ratios
EPAM's Return On Assets of 9.85% is amongst the best of the industry. EPAM outperforms 80.95% of its industry peers.
Looking at the Return On Equity, with a value of 12.40%, EPAM is in the better half of the industry, outperforming 71.43% of the companies in the same industry.
EPAM has a better Return On Invested Capital (11.22%) than 79.76% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for EPAM is in line with the industry average of 12.42%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.85% | ||
| ROE | 12.4% | ||
| ROIC | 11.22% |
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 (9.28%) 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 (11.19%) than 71.43% of its industry peers.
In the last couple of years the Operating Margin of EPAM has declined.
EPAM has a Gross Margin of 30.36%. This is comparable to the rest of the industry: EPAM outperforms 41.67% of its industry peers.
EPAM's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.19% | ||
| PM (TTM) | 9.28% | ||
| GM | 30.36% |
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
EPAM has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
EPAM has about the same amout of shares outstanding than it did 1 year ago.
Compared to 5 years ago, EPAM has more shares outstanding
EPAM has a better debt/assets ratio than last year.
2.2 Solvency
EPAM has an Altman-Z score of 10.18. This indicates that EPAM is financially healthy and has little risk of bankruptcy at the moment.
EPAM has a Altman-Z score of 10.18. This is amongst the best in the industry. EPAM outperforms 92.86% of its industry peers.
EPAM has a debt to FCF ratio of 0.04. This is a very positive value and a sign of high solvency as it would only need 0.04 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 0.04, EPAM belongs to the best of the industry, outperforming 92.86% of the companies in the same industry.
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 84.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.04 | ||
| Altman-Z | 10.18 |
ROIC/WACC1.06
WACC10.55%
2.3 Liquidity
EPAM has a Current Ratio of 4.68. This indicates that EPAM is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 4.68, EPAM belongs to the top of the industry, outperforming 92.86% of the companies in the same industry.
EPAM has a Quick Ratio of 4.68. This indicates that EPAM is financially healthy and has no problem in meeting its short term obligations.
Looking at the Quick ratio, with a value of 4.68, EPAM belongs to the top of the industry, outperforming 92.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.68 | ||
| Quick Ratio | 4.68 |
3. Growth
3.1 Past
The earnings per share for EPAM have decreased by -2.76% in the last year.
The Earnings Per Share has been growing by 19.31% on average over the past years. This is quite good.
The Revenue has decreased by -4.50% in the past year.
EPAM shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 20.54% yearly.
EPS 1Y (TTM)-2.76%
EPS 3Y18.59%
EPS 5Y19.31%
EPS growth Q2Q-0.4%
Revenue 1Y (TTM)-4.5%
Revenue growth 3Y20.82%
Revenue growth 5Y20.54%
Revenue growth Q2Q-3.76%
3.2 Future
The Earnings Per Share is expected to grow by 12.97% on average over the next years. This is quite good.
The Revenue is expected to grow by 11.03% 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 5Y12.97%
Revenue Next Year3.49%
Revenue Next 2Y8.61%
Revenue Next 3Y11.27%
Revenue Next 5Y11.03%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 17.75, the valuation of EPAM can be described as rather expensive.
Based on the Price/Earnings ratio, EPAM is valued a bit cheaper than 70.24% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.60. EPAM is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 15.33, the valuation of EPAM can be described as correct.
Based on the Price/Forward Earnings ratio, EPAM is valued a bit cheaper than the industry average as 77.38% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 20.15. EPAM is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.75 | ||
| Fwd PE | 15.33 |
4.2 Price Multiples
EPAM's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. EPAM is cheaper than 60.71% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, EPAM is valued a bit cheaper than the industry average as 72.62% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.85 | ||
| EV/EBITDA | 14.42 |
4.3 Compensation for Growth
EPAM has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.92
EPS Next 2Y7.55%
EPS Next 3Y10.84%
5. Dividend
5.1 Amount
EPAM does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
EPAM SYSTEMS INC
NYSE:EPAM (5/17/2024, 7:04:00 PM)
After market: 187.9 +0.1 (+0.05%)187.8
-1.34 (-0.71%)
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 Cap10.89B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
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Surprises & Revisions
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.75 | ||
| Fwd PE | 15.33 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
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SpS
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TBVpS
PEG (NY)N/A
PEG (5Y)0.92
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.85% | ||
| ROE | 12.4% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 11.19% | ||
| PM (TTM) | 9.28% | ||
| GM | 30.36% | ||
| 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 Turnover1.06
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 | 4.68 | ||
| Quick Ratio | 4.68 | ||
| 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)-2.76%
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)-4.5%
Revenue growth 3Y20.82%
Revenue growth 5Y
Revenue growth Q2Q
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Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
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EBIT growth 3Y
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