EPAM SYSTEMS INC (EPAM) Stock Fundamental Analysis
USA - NYSE:EPAM - US29414B1044 - Common Stock
154.57 USD
+0.02 (+0.01%)
154.88 USD
+0.31 (+0.2%)
Taking everything into account, EPAM scores 6 out of 10 in our fundamental rating. EPAM was compared to 86 industry peers in the IT Services industry. EPAM has an excellent financial health rating, but there are some minor concerns on its profitability. 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.
EPAM had a positive operating cash flow in the past year.
EPAM had positive earnings in each of the past 5 years.
Each year in the past 5 years EPAM had a positive operating cash flow.
1.2 Ratios
EPAM has a better Return On Assets (8.52%) than 80.23% of its industry peers.
EPAM's Return On Equity of 10.94% is fine compared to the rest of the industry. EPAM outperforms 67.44% of its industry peers.
With a decent Return On Invested Capital value of 10.85%, EPAM is doing good in the industry, outperforming 75.58% 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 21.79%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.52% | ||
| ROE | 10.94% | ||
| ROIC | 10.85% |
ROA(3y)9.87%
ROA(5y)11.06%
ROE(3y)12.84%
ROE(5y)14.88%
ROIC(3y)11.98%
ROIC(5y)12.84%
1.3 Margins
With a decent Profit Margin value of 7.91%, EPAM is doing good in the industry, outperforming 74.42% of the companies in the same industry.
In the last couple of years the Profit Margin of EPAM has declined.
EPAM's Operating Margin of 10.91% is fine compared to the rest of the industry. EPAM outperforms 72.09% of its industry peers.
EPAM's Operating Margin has declined in the last couple of years.
EPAM's Gross Margin of 30.05% is on the low side compared to the rest of the industry. EPAM is outperformed by 62.79% of its industry peers.
EPAM's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.91% | ||
| PM (TTM) | 7.91% | ||
| GM | 30.05% |
OM growth 3Y-7.24%
OM growth 5Y-2.7%
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), EPAM is creating some value.
EPAM has less shares outstanding than it did 1 year ago.
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
An Altman-Z score of 7.53 indicates that EPAM is not in any danger for bankruptcy at the moment.
EPAM has a Altman-Z score of 7.53. This is amongst the best in the industry. EPAM outperforms 88.37% of its industry peers.
The Debt to FCF ratio of EPAM is 0.06, which is an excellent value as it means it would take EPAM, only 0.06 years of fcf income to pay off all of its debts.
EPAM's Debt to FCF ratio of 0.06 is amongst the best of the industry. EPAM outperforms 95.35% of its industry peers.
EPAM has a Debt/Equity ratio of 0.01. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of EPAM (0.01) is better than 83.72% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.06 | ||
| Altman-Z | 7.53 |
ROIC/WACC1.19
WACC9.14%
2.3 Liquidity
A Current Ratio of 3.17 indicates that EPAM has no problem at all paying its short term obligations.
EPAM's Current ratio of 3.17 is amongst the best of the industry. EPAM outperforms 81.40% of its industry peers.
EPAM has a Quick Ratio of 3.17. This indicates that EPAM is financially healthy and has no problem in meeting its short term obligations.
EPAM has a better Quick ratio (3.17) than 81.40% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.17 | ||
| Quick Ratio | 3.17 |
3. Growth
3.1 Past
EPAM shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.22%.
The Earnings Per Share has been growing by 14.89% on average over the past years. This is quite good.
Looking at the last year, EPAM shows a quite strong growth in Revenue. The Revenue has grown by 9.73% in the last year.
The Revenue has been growing by 15.56% on average over the past years. This is quite good.
EPS 1Y (TTM)7.22%
EPS 3Y6.34%
EPS 5Y14.89%
EPS Q2Q%13.06%
Revenue 1Y (TTM)9.73%
Revenue growth 3Y7.95%
Revenue growth 5Y15.56%
Sales Q2Q%18.04%
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 8.94% yearly.
EPAM is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.84% yearly.
EPS Next Y3.88%
EPS Next 2Y7.19%
EPS Next 3Y8.3%
EPS Next 5Y8.94%
Revenue Next Year15.25%
Revenue Next 2Y11.11%
Revenue Next 3Y10.42%
Revenue Next 5Y9.84%
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 13.88, which indicates a correct valuation of EPAM.
EPAM's Price/Earnings ratio is rather cheap when compared to the industry. EPAM is cheaper than 81.40% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.20, EPAM is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 12.38, the valuation of EPAM can be described as correct.
EPAM's Price/Forward Earnings ratio is rather cheap when compared to the industry. EPAM is cheaper than 82.56% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.71, EPAM is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.88 | ||
| Fwd PE | 12.38 |
4.2 Price Multiples
EPAM's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. EPAM is cheaper than 72.09% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, EPAM is valued a bit cheaper than 67.44% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.01 | ||
| EV/EBITDA | 10.54 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates EPAM does not grow enough to justify the current Price/Earnings ratio.
PEG (NY)3.57
PEG (5Y)0.93
EPS Next 2Y7.19%
EPS Next 3Y8.3%
5. Dividend
5.1 Amount
No dividends for EPAM!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
154.57
+0.02 (+0.01%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners94.25%
Inst Owner Change-1.14%
Ins Owners3.54%
Ins Owner Change1.86%
Market Cap8.61B
Analysts80.83
Price Target217.09 (40.45%)
Short Float %3.81%
Short Ratio2.67
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
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)2
Avg EPS beat(2)4.02%
Min EPS beat(2)3.97%
Max EPS beat(2)4.07%
EPS beat(4)4
Avg EPS beat(4)5.61%
Min EPS beat(4)1.07%
Max EPS beat(4)13.33%
EPS beat(8)8
Avg EPS beat(8)5.66%
EPS beat(12)12
Avg EPS beat(12)7.23%
EPS beat(16)16
Avg EPS beat(16)10.93%
Revenue beat(2)0
Avg Revenue beat(2)-0.52%
Min Revenue beat(2)-0.56%
Max Revenue beat(2)-0.48%
Revenue beat(4)1
Avg Revenue beat(4)-0.21%
Min Revenue beat(4)-0.64%
Max Revenue beat(4)0.84%
Revenue beat(8)1
Avg Revenue beat(8)-0.68%
Revenue beat(12)2
Avg Revenue beat(12)-0.74%
Revenue beat(16)5
Avg Revenue beat(16)0.24%
PT rev (1m)-2.11%
PT rev (3m)-2.14%
EPS NQ rev (1m)1.63%
EPS NQ rev (3m)3.6%
EPS NY rev (1m)2.08%
EPS NY rev (3m)2.35%
Revenue NQ rev (1m)0.36%
Revenue NQ rev (3m)1.82%
Revenue NY rev (1m)0.9%
Revenue NY rev (3m)1.04%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.88 | ||
| Fwd PE | 12.38 | ||
| P/S | 1.7 | ||
| P/FCF | 21.01 | ||
| P/OCF | 19.15 | ||
| P/B | 2.35 | ||
| P/tB | 4.26 | ||
| EV/EBITDA | 10.54 |
EPS(TTM)11.14
EY7.21%
EPS(NY)12.49
Fwd EY8.08%
FCF(TTM)7.36
FCFY4.76%
OCF(TTM)8.07
OCFY5.22%
SpS91.04
BVpS65.85
TBVpS36.31
PEG (NY)3.57
PEG (5Y)0.93
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.52% | ||
| ROE | 10.94% | ||
| ROCE | 13.96% | ||
| ROIC | 10.85% | ||
| ROICexc | 14.72% | ||
| ROICexgc | 33.69% | ||
| OM | 10.91% | ||
| PM (TTM) | 7.91% | ||
| GM | 30.05% | ||
| FCFM | 8.08% |
ROA(3y)9.87%
ROA(5y)11.06%
ROE(3y)12.84%
ROE(5y)14.88%
ROIC(3y)11.98%
ROIC(5y)12.84%
ROICexc(3y)23.91%
ROICexc(5y)27.45%
ROICexgc(3y)44.54%
ROICexgc(5y)48.5%
ROCE(3y)15.42%
ROCE(5y)16.54%
ROICexcg growth 3Y-11.88%
ROICexcg growth 5Y3.29%
ROICexc growth 3Y-20.35%
ROICexc growth 5Y-8.92%
OM growth 3Y-7.24%
OM growth 5Y-2.7%
PM growth 3Y-9.14%
PM growth 5Y-3.32%
GM growth 3Y-3.28%
GM growth 5Y-2.67%
F-Score6
Asset Turnover1.08
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.06 | ||
| Debt/EBITDA | 0.03 | ||
| Cap/Depr | 23.85% | ||
| Cap/Sales | 0.79% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 62.42% | ||
| Profit Quality | 102.14% | ||
| Current Ratio | 3.17 | ||
| Quick Ratio | 3.17 | ||
| Altman-Z | 7.53 |
F-Score6
WACC9.14%
ROIC/WACC1.19
Cap/Depr(3y)45.04%
Cap/Depr(5y)75.64%
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)7.22%
EPS 3Y6.34%
EPS 5Y14.89%
EPS Q2Q%13.06%
EPS Next Y3.88%
EPS Next 2Y7.19%
EPS Next 3Y8.3%
EPS Next 5Y8.94%
Revenue 1Y (TTM)9.73%
Revenue growth 3Y7.95%
Revenue growth 5Y15.56%
Sales Q2Q%18.04%
Revenue Next Year15.25%
Revenue Next 2Y11.11%
Revenue Next 3Y10.42%
Revenue Next 5Y9.84%
EBIT growth 1Y11.21%
EBIT growth 3Y0.14%
EBIT growth 5Y12.45%
EBIT Next Year14.6%
EBIT Next 3Y12.62%
EBIT Next 5Y11.07%
FCF growth 1Y-26.81%
FCF growth 3Y4.58%
FCF growth 5Y22.87%
OCF growth 1Y-26.87%
OCF growth 3Y-0.77%
OCF growth 5Y14.23%