EPAM SYSTEMS INC (EPAM)
US29414B1044 - Common Stock
We assign a fundamental rating of 6 out of 10 to EPAM. EPAM was compared to 83 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 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.
EPAM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
EPAM has a Return On Assets of 10.07%. This is amongst the best in the industry. EPAM outperforms 82.72% of its industry peers.
EPAM has a better Return On Equity (12.63%) than 72.84% of its industry peers.
EPAM has a better Return On Invested Capital (11.35%) than 81.48% of its industry peers.
EPAM had an Average Return On Invested Capital over the past 3 years of 13.88%. This is above the industry average of 9.40%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.07% | ||
| ROE | 12.63% | ||
| ROIC | 11.35% |
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 (9.68%) than 72.84% of its industry peers.
In the last couple of years the Profit Margin of EPAM has declined.
With a decent Operating Margin value of 11.53%, EPAM is doing good in the industry, outperforming 76.54% of the companies in the same industry.
In the last couple of years the Operating Margin of EPAM has declined.
Looking at the Gross Margin, with a value of 30.84%, EPAM is in line with its industry, outperforming 43.21% of the companies in the same industry.
In the last couple of years the Gross Margin of EPAM has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.53% | ||
| PM (TTM) | 9.68% | ||
| GM | 30.84% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so EPAM is still creating some value.
EPAM has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for EPAM has been increased compared to 5 years ago.
EPAM has a better debt/assets ratio than last year.
2.2 Solvency
EPAM has an Altman-Z score of 12.22. This indicates that EPAM is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 12.22, EPAM belongs to the best of the industry, outperforming 92.59% of the companies in the same industry.
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.
EPAM has a better Debt to FCF ratio (0.04) than 93.83% of its industry peers.
A Debt/Equity ratio of 0.01 indicates that EPAM is not too dependend on debt financing.
The Debt to Equity ratio of EPAM (0.01) is better than 82.72% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.04 | ||
| Altman-Z | 12.22 |
ROIC/WACC0.95
WACC11.92%
2.3 Liquidity
A Current Ratio of 4.56 indicates that EPAM has no problem at all paying its short term obligations.
EPAM has a Current ratio of 4.56. This is amongst the best in the industry. EPAM outperforms 92.59% of its industry peers.
EPAM has a Quick Ratio of 4.56. This indicates that EPAM is financially healthy and has no problem in meeting its short term obligations.
EPAM has a better Quick ratio (4.56) than 92.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.56 | ||
| Quick Ratio | 4.56 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 0.09% over the past year.
EPAM shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 19.31% yearly.
The Revenue has decreased by -2.68% in the past year.
The Revenue has been growing by 20.54% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)0.09%
EPS 3Y18.59%
EPS 5Y19.31%
EPS Q2Q%14.29%
Revenue 1Y (TTM)-2.68%
Revenue growth 3Y20.82%
Revenue growth 5Y20.54%
Sales Q2Q%1.34%
3.2 Future
The Earnings Per Share is expected to grow by 8.20% on average over the next years. This is quite good.
The Revenue is expected to grow by 5.45% on average over the next years.
EPS Next Y3.73%
EPS Next 2Y4.3%
EPS Next 3Y7.01%
EPS Next 5Y8.2%
Revenue Next Year0.44%
Revenue Next 2Y5.46%
Revenue Next 3Y6.88%
Revenue Next 5Y5.45%
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 23.03, which indicates a rather expensive current valuation of EPAM.
Based on the Price/Earnings ratio, EPAM is valued a bit cheaper than the industry average as 65.43% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of EPAM to the average of the S&P500 Index (27.73), we can say EPAM is valued inline with the index average.
With a Price/Forward Earnings ratio of 21.55, EPAM is valued on the expensive side.
Based on the Price/Forward Earnings ratio, EPAM is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
EPAM is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.83, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.03 | ||
| Fwd PE | 21.55 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, EPAM is valued a bit cheaper than 62.96% 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 62.96% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.54 | ||
| EV/EBITDA | 19.37 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of EPAM may justify a higher PE ratio.
PEG (NY)6.18
PEG (5Y)1.19
EPS Next 2Y4.3%
EPS Next 3Y7.01%
5. Dividend
5.1 Amount
No dividends for EPAM!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
EPAM SYSTEMS INC
NYSE:EPAM (12/20/2024, 8:07:17 PM)
After market: 248.26 0 (0%)248.26
+1.46 (+0.59%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners91.12%
Inst Owner Change-2.52%
Ins Owners3.38%
Ins Owner Change-0.62%
Market Cap14.08B
Analysts76.67
Price Target257.94 (3.9%)
Short Float %1.17%
Short Ratio0.95
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/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)9.84%
Min EPS beat(2)6.34%
Max EPS beat(2)13.33%
EPS beat(4)4
Avg EPS beat(4)7.91%
Min EPS beat(4)4.1%
Max EPS beat(4)13.33%
EPS beat(8)8
Avg EPS beat(8)7.19%
EPS beat(12)12
Avg EPS beat(12)13.25%
EPS beat(16)16
Avg EPS beat(16)11.15%
Revenue beat(2)0
Avg Revenue beat(2)-1.02%
Min Revenue beat(2)-1.41%
Max Revenue beat(2)-0.64%
Revenue beat(4)0
Avg Revenue beat(4)-0.96%
Min Revenue beat(4)-1.65%
Max Revenue beat(4)-0.15%
Revenue beat(8)0
Avg Revenue beat(8)-1.22%
Revenue beat(12)3
Avg Revenue beat(12)0.3%
Revenue beat(16)7
Avg Revenue beat(16)0.33%
PT rev (1m)14.04%
PT rev (3m)15.05%
EPS NQ rev (1m)0%
EPS NQ rev (3m)3.26%
EPS NY rev (1m)2.56%
EPS NY rev (3m)4.68%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)4.48%
Revenue NY rev (1m)0.67%
Revenue NY rev (3m)1.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.03 | ||
| Fwd PE | 21.55 | ||
| P/S | 3.04 | ||
| P/FCF | 24.54 | ||
| P/OCF | 23.46 | ||
| P/B | 3.96 | ||
| P/tB | 4.93 | ||
| EV/EBITDA | 19.37 |
EPS(TTM)10.78
EY4.34%
EPS(NY)11.52
Fwd EY4.64%
FCF(TTM)10.12
FCFY4.07%
OCF(TTM)10.58
OCFY4.26%
SpS81.75
BVpS62.66
TBVpS50.38
PEG (NY)6.18
PEG (5Y)1.19
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.07% | ||
| ROE | 12.63% | ||
| ROCE | 14.15% | ||
| ROIC | 11.35% | ||
| ROICexc | 24.96% | ||
| ROICexgc | 41.99% | ||
| OM | 11.53% | ||
| PM (TTM) | 9.68% | ||
| GM | 30.84% | ||
| FCFM | 12.38% |
ROA(3y)11.24%
ROA(5y)11.47%
ROE(3y)15.12%
ROE(5y)15.64%
ROIC(3y)13.88%
ROIC(5y)13.64%
ROICexc(3y)30.06%
ROICexc(5y)30.28%
ROICexgc(3y)52.51%
ROICexgc(5y)48.75%
ROCE(3y)17.35%
ROCE(5y)17.03%
ROICexcg growth 3Y-4.66%
ROICexcg growth 5Y-4.89%
ROICexc growth 3Y-9%
ROICexc growth 5Y-5.09%
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%
F-Score5
Asset Turnover1.04
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.04 | ||
| Debt/EBITDA | 0.04 | ||
| Cap/Depr | 30.66% | ||
| Cap/Sales | 0.57% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 96.71% | ||
| Profit Quality | 127.86% | ||
| Current Ratio | 4.56 | ||
| Quick Ratio | 4.56 | ||
| Altman-Z | 12.22 |
F-Score5
WACC11.92%
ROIC/WACC0.95
Cap/Depr(3y)84.35%
Cap/Depr(5y)116.33%
Cap/Sales(3y)1.75%
Cap/Sales(5y)2.44%
Profit Quality(3y)104.98%
Profit Quality(5y)106.48%
High Growth Momentum
Growth
EPS 1Y (TTM)0.09%
EPS 3Y18.59%
EPS 5Y19.31%
EPS Q2Q%14.29%
EPS Next Y3.73%
EPS Next 2Y4.3%
EPS Next 3Y7.01%
EPS Next 5Y8.2%
Revenue 1Y (TTM)-2.68%
Revenue growth 3Y20.82%
Revenue growth 5Y20.54%
Sales Q2Q%1.34%
Revenue Next Year0.44%
Revenue Next 2Y5.46%
Revenue Next 3Y6.88%
Revenue Next 5Y5.45%
EBIT growth 1Y-7.06%
EBIT growth 3Y11.6%
EBIT growth 5Y16.49%
EBIT Next Year15.04%
EBIT Next 3Y11.32%
EBIT Next 5Y10.52%
FCF growth 1Y28.69%
FCF growth 3Y3.95%
FCF growth 5Y15.98%
OCF growth 1Y6.69%
OCF growth 3Y1.1%
OCF growth 5Y14%