EPAM SYSTEMS INC (EPAM)
US29414B1044 - Common Stock
EPAM gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 85 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
EPAM had positive earnings in the past year.
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
With an excellent Return On Assets value of 9.70%, EPAM belongs to the best of the industry, outperforming 83.13% of the companies in the same industry.
EPAM's Return On Equity of 12.06% is fine compared to the rest of the industry. EPAM outperforms 73.49% of its industry peers.
With an excellent Return On Invested Capital value of 11.02%, EPAM belongs to the best of the industry, outperforming 81.93% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for EPAM is above the industry average of 9.00%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.7% | ||
| ROE | 12.06% | ||
| ROIC | 11.02% |
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
With a decent Profit Margin value of 8.86%, EPAM is doing good in the industry, outperforming 72.29% of the companies in the same industry.
In the last couple of years the Profit Margin of EPAM has declined.
The Operating Margin of EPAM (10.76%) is better than 72.29% of its industry peers.
EPAM's Operating Margin has declined in the last couple of years.
EPAM has a Gross Margin (29.96%) which is in line with its industry peers.
In the last couple of years the Gross Margin of EPAM has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.76% | ||
| PM (TTM) | 8.86% | ||
| GM | 29.96% |
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.
Compared to 1 year ago, EPAM has about the same amount of shares outstanding.
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 11.31. This indicates that EPAM is financially healthy and has little risk of bankruptcy at the moment.
EPAM has a better Altman-Z score (11.31) than 91.57% 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 93.98% of its industry peers.
A Debt/Equity ratio of 0.01 indicates that EPAM is not too dependend on debt financing.
EPAM has a better Debt to Equity ratio (0.01) than 81.93% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.05 | ||
| Altman-Z | 11.31 |
ROIC/WACC1.17
WACC9.39%
2.3 Liquidity
A Current Ratio of 4.84 indicates that EPAM has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 4.84, EPAM belongs to the top of the industry, outperforming 93.98% of the companies in the same industry.
EPAM has a Quick Ratio of 4.84. This indicates that EPAM is financially healthy and has no problem in meeting its short term obligations.
EPAM has a Quick ratio of 4.84. This is amongst the best in the industry. EPAM outperforms 93.98% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.84 | ||
| Quick Ratio | 4.84 |
3. Growth
3.1 Past
EPAM shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -6.73%.
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.
The Revenue has been growing by 20.54% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)-6.73%
EPS 3Y18.59%
EPS 5Y19.31%
EPS Q2Q%-7.2%
Revenue 1Y (TTM)-4.5%
Revenue growth 3Y20.82%
Revenue growth 5Y20.54%
Sales Q2Q%-2.02%
3.2 Future
EPAM is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.34% yearly.
The Revenue is expected to grow by 6.33% on average over the next years.
EPS Next Y-0.83%
EPS Next 2Y2.78%
EPS Next 3Y5.9%
EPS Next 5Y8.34%
Revenue Next Year-1.22%
Revenue Next 2Y2.32%
Revenue Next 3Y5.13%
Revenue Next 5Y6.33%
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
With a Price/Earnings ratio of 19.51, EPAM is valued on the expensive side.
Based on the Price/Earnings ratio, EPAM is valued a bit cheaper than the industry average as 71.08% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 28.76, EPAM is valued a bit cheaper.
A Price/Forward Earnings ratio of 18.12 indicates a rather expensive valuation of EPAM.
Based on the Price/Forward Earnings ratio, EPAM is valued a bit cheaper than the industry average as 73.49% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of EPAM to the average of the S&P500 Index (23.90), we can say EPAM is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.51 | ||
| Fwd PE | 18.12 |
4.2 Price Multiples
63.86% of the companies in the same industry are more expensive than EPAM, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, EPAM is valued a bit cheaper than the industry average as 69.88% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.06 | ||
| EV/EBITDA | 16.46 |
4.3 Compensation for Growth
The decent profitability rating of EPAM may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.01
EPS Next 2Y2.78%
EPS Next 3Y5.9%
5. Dividend
5.1 Amount
EPAM does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
EPAM SYSTEMS INC
NYSE:EPAM (11/6/2024, 8:22:42 PM)
Premarket: 223 +20.31 (+10.02%)202.69
+10.47 (+5.45%)
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 Cap11.54B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
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Div Incr Years
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Surprises & Revisions
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PT rev (1m)
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EPS NQ rev (3m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.51 | ||
| Fwd PE | 18.12 | ||
| 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)1.01
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.7% | ||
| ROE | 12.06% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 10.76% | ||
| PM (TTM) | 8.86% | ||
| GM | 29.96% | ||
| 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 Turnover1.09
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 | 4.84 | ||
| Quick Ratio | 4.84 | ||
| 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)
High Growth Momentum
Growth
EPS 1Y (TTM)-6.73%
EPS 3Y18.59%
EPS 5Y
EPS Q2Q%
EPS Next Y-0.83%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-4.5%
Revenue growth 3Y20.82%
Revenue growth 5Y
Sales 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