EPAM SYSTEMS INC (EPAM) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:EPAM - US29414B1044 - Common Stock
219.78 USD
+1.58 (+0.72%)
219.78 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to EPAM. EPAM was compared to 88 industry peers in the IT Services industry. While EPAM has a great health rating, its profitability is only average at the moment. While showing a medium growth rate, EPAM is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
EPAM had positive earnings in the past year.
EPAM had a positive operating cash flow in the past year.
In the past 5 years EPAM has always been profitable.
In the past 5 years EPAM always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of EPAM (7.67%) is better than 77.27% of its industry peers.
EPAM has a Return On Equity of 9.97%. This is in the better half of the industry: EPAM outperforms 65.91% of its industry peers.
With a decent Return On Invested Capital value of 10.71%, EPAM is doing good in the industry, outperforming 77.27% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for EPAM is significantly below the industry average of 28.99%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.67% | ||
| ROE | 9.97% | ||
| ROIC | 10.72% |
ROA(3y)9.87%
ROA(5y)11.06%
ROE(3y)12.84%
ROE(5y)14.88%
ROIC(3y)11.99%
ROIC(5y)12.85%
1.3 Margins
With a decent Profit Margin value of 7.01%, EPAM is doing good in the industry, outperforming 69.32% of the companies in the same industry.
EPAM's Profit Margin has declined in the last couple of years.
The Operating Margin of EPAM (10.43%) is better than 71.59% of its industry peers.
In the last couple of years the Operating Margin of EPAM has declined.
Looking at the Gross Margin, with a value of 28.92%, EPAM is doing worse than 62.50% of the companies in the same industry.
EPAM's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.43% | ||
| PM (TTM) | 7.01% | ||
| GM | 28.92% |
OM growth 3Y-7.14%
OM growth 5Y-2.63%
PM growth 3Y-9.14%
PM growth 5Y-3.32%
GM growth 3Y-3.28%
GM growth 5Y-2.67%
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.
Compared to 1 year ago, EPAM has less shares outstanding
Compared to 5 years ago, EPAM has more shares outstanding
Compared to 1 year ago, EPAM has an improved debt to assets ratio.
2.2 Solvency
EPAM has an Altman-Z score of 9.05. This indicates that EPAM is financially healthy and has little risk of bankruptcy at the moment.
EPAM has a Altman-Z score of 9.05. This is amongst the best in the industry. EPAM outperforms 90.91% of its industry peers.
EPAM has a debt to FCF ratio of 0.05. This is a very positive value and a sign of high solvency as it would only need 0.05 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.05, EPAM belongs to the top of the industry, outperforming 92.05% of the companies in the same industry.
A Debt/Equity ratio of 0.01 indicates that EPAM is not too dependend on debt financing.
EPAM has a Debt to Equity ratio of 0.01. This is amongst the best in the industry. EPAM outperforms 82.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.05 | ||
| Altman-Z | 9.05 |
ROIC/WACC1.17
WACC9.14%
2.3 Liquidity
EPAM has a Current Ratio of 3.02. This indicates that EPAM is financially healthy and has no problem in meeting its short term obligations.
EPAM has a better Current ratio (3.02) than 78.41% of its industry peers.
EPAM has a Quick Ratio of 3.02. This indicates that EPAM is financially healthy and has no problem in meeting its short term obligations.
EPAM has a Quick ratio of 3.02. This is in the better half of the industry: EPAM outperforms 79.55% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.02 | ||
| Quick Ratio | 3.02 |
3. Growth
3.1 Past
EPAM shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.97%.
EPAM shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 14.89% yearly.
Looking at the last year, EPAM shows a quite strong growth in Revenue. The Revenue has grown by 14.26% in the last year.
Measured over the past years, EPAM shows a quite strong growth in Revenue. The Revenue has been growing by 15.56% on average per year.
EPS 1Y (TTM)2.97%
EPS 3Y6.34%
EPS 5Y14.89%
EPS Q2Q%-1.28%
Revenue 1Y (TTM)14.26%
Revenue growth 3Y7.95%
Revenue growth 5Y15.56%
Sales Q2Q%19.43%
3.2 Future
Based on estimates for the next years, EPAM will show a small growth in Earnings Per Share. The EPS will grow by 5.17% on average per year.
Based on estimates for the next years, EPAM will show a small growth in Revenue. The Revenue will grow by 7.81% on average per year.
EPS Next Y7.22%
EPS Next 2Y8.1%
EPS Next 3Y9.19%
EPS Next 5Y5.17%
Revenue Next Year15.96%
Revenue Next 2Y11.41%
Revenue Next 3Y10.52%
Revenue Next 5Y7.81%
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
Based on the Price/Earnings ratio of 19.80, the valuation of EPAM can be described as rather expensive.
Based on the Price/Earnings ratio, EPAM is valued a bit cheaper than the industry average as 69.32% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of EPAM to the average of the S&P500 Index (26.92), we can say EPAM is valued slightly cheaper.
The Price/Forward Earnings ratio is 17.30, which indicates a rather expensive current valuation of EPAM.
69.32% of the companies in the same industry are more expensive than EPAM, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of EPAM to the average of the S&P500 Index (23.57), we can say EPAM is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.8 | ||
| Fwd PE | 17.3 |
4.2 Price Multiples
65.91% of the companies in the same industry are more expensive than EPAM, based on the Enterprise Value to EBITDA ratio.
EPAM's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.44 | ||
| EV/EBITDA | 16.81 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PEG (NY)2.74
PEG (5Y)1.33
EPS Next 2Y8.1%
EPS Next 3Y9.19%
5. Dividend
5.1 Amount
No dividends for EPAM!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
219.78
+1.58 (+0.72%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners100.2%
Inst Owner Change0%
Ins Owners3.62%
Ins Owner Change-0.21%
Market Cap12.14B
Revenue(TTM)5.30B
Net Income(TTM)371.62M
Analysts80
Price Target215.01 (-2.17%)
Short Float %5.54%
Short Ratio3.17
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.91%
Min EPS beat(2)-0.24%
Max EPS beat(2)4.07%
EPS beat(4)3
Avg EPS beat(4)2.22%
Min EPS beat(4)-0.24%
Max EPS beat(4)4.07%
EPS beat(8)7
Avg EPS beat(8)5.06%
EPS beat(12)11
Avg EPS beat(12)5.54%
EPS beat(16)15
Avg EPS beat(16)10.49%
Revenue beat(2)0
Avg Revenue beat(2)-0.55%
Min Revenue beat(2)-0.61%
Max Revenue beat(2)-0.48%
Revenue beat(4)1
Avg Revenue beat(4)-0.2%
Min Revenue beat(4)-0.61%
Max Revenue beat(4)0.84%
Revenue beat(8)1
Avg Revenue beat(8)-0.58%
Revenue beat(12)1
Avg Revenue beat(12)-0.88%
Revenue beat(16)4
Avg Revenue beat(16)0.18%
PT rev (1m)1.5%
PT rev (3m)-1.42%
EPS NQ rev (1m)0%
EPS NQ rev (3m)9%
EPS NY rev (1m)0%
EPS NY rev (3m)3.19%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.07%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.6%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.8 | ||
| Fwd PE | 17.3 | ||
| P/S | 2.29 | ||
| P/FCF | 26.44 | ||
| P/OCF | 24.17 | ||
| P/B | 3.26 | ||
| P/tB | 5.79 | ||
| EV/EBITDA | 16.81 |
EPS(TTM)11.1
EY5.05%
EPS(NY)12.7
Fwd EY5.78%
FCF(TTM)8.31
FCFY3.78%
OCF(TTM)9.09
OCFY4.14%
SpS95.91
BVpS67.46
TBVpS37.97
PEG (NY)2.74
PEG (5Y)1.33
Graham Number129.8
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.67% | ||
| ROE | 9.97% | ||
| ROCE | 13.78% | ||
| ROIC | 10.72% | ||
| ROICexc | 15.51% | ||
| ROICexgc | 37.67% | ||
| OM | 10.43% | ||
| PM (TTM) | 7.01% | ||
| GM | 28.92% | ||
| FCFM | 8.67% |
ROA(3y)9.87%
ROA(5y)11.06%
ROE(3y)12.84%
ROE(5y)14.88%
ROIC(3y)11.99%
ROIC(5y)12.85%
ROICexc(3y)23.93%
ROICexc(5y)27.46%
ROICexgc(3y)44.58%
ROICexgc(5y)48.53%
ROCE(3y)15.43%
ROCE(5y)16.55%
ROICexgc growth 3Y-11.78%
ROICexgc growth 5Y3.36%
ROICexc growth 3Y-20.26%
ROICexc growth 5Y-8.86%
OM growth 3Y-7.14%
OM growth 5Y-2.63%
PM growth 3Y-9.14%
PM growth 5Y-3.32%
GM growth 3Y-3.28%
GM growth 5Y-2.67%
F-Score6
Asset Turnover1.09
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.05 | ||
| Debt/EBITDA | 0.04 | ||
| Cap/Depr | 46.68% | ||
| Cap/Sales | 0.82% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 77.89% | ||
| Profit Quality | 123.54% | ||
| Current Ratio | 3.02 | ||
| Quick Ratio | 3.02 | ||
| Altman-Z | 9.05 |
F-Score6
WACC9.14%
ROIC/WACC1.17
Cap/Depr(3y)51.75%
Cap/Depr(5y)79.67%
Cap/Sales(3y)0.99%
Cap/Sales(5y)1.71%
Profit Quality(3y)111.75%
Profit Quality(5y)115.25%
High Growth Momentum
Growth
EPS 1Y (TTM)2.97%
EPS 3Y6.34%
EPS 5Y14.89%
EPS Q2Q%-1.28%
EPS Next Y7.22%
EPS Next 2Y8.1%
EPS Next 3Y9.19%
EPS Next 5Y5.17%
Revenue 1Y (TTM)14.26%
Revenue growth 3Y7.95%
Revenue growth 5Y15.56%
Sales Q2Q%19.43%
Revenue Next Year15.96%
Revenue Next 2Y11.41%
Revenue Next 3Y10.52%
Revenue Next 5Y7.81%
EBIT growth 1Y3.34%
EBIT growth 3Y0.25%
EBIT growth 5Y12.52%
EBIT Next Year19.76%
EBIT Next 3Y13.13%
EBIT Next 5Y11.07%
FCF growth 1Y-14.58%
FCF growth 3Y4.58%
FCF growth 5Y22.87%
OCF growth 1Y-13.01%
OCF growth 3Y-0.77%
OCF growth 5Y14.23%
EPAM SYSTEMS INC / EPAM FAQ
What is the fundamental rating for EPAM stock?
ChartMill assigns a fundamental rating of 5 / 10 to EPAM.
What is the valuation status for EPAM stock?
ChartMill assigns a valuation rating of 3 / 10 to EPAM SYSTEMS INC (EPAM). This can be considered as Overvalued.
What is the profitability of EPAM stock?
EPAM SYSTEMS INC (EPAM) has a profitability rating of 5 / 10.
What is the valuation of EPAM SYSTEMS INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for EPAM SYSTEMS INC (EPAM) is 19.8 and the Price/Book (PB) ratio is 3.26.