EPAM SYSTEMS INC (EPAM) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:EPAM - US29414B1044 - Common Stock
211.82 USD
-0.11 (-0.05%)
211.82 USD
0 (0%)
Overall EPAM gets a fundamental rating of 5 out of 10. We evaluated EPAM against 88 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 correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year EPAM was profitable.
EPAM had a positive operating cash flow in the past year.
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 7.67%. This is in the better half of the industry: EPAM outperforms 77.27% of its industry peers.
EPAM has a better Return On Equity (9.97%) than 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
The Profit Margin of EPAM (7.01%) is better than 69.32% of its industry peers.
EPAM's Profit Margin has declined in the last couple of years.
EPAM's Operating Margin of 10.43% is fine compared to the rest of the industry. EPAM outperforms 71.59% of its industry peers.
EPAM's Operating Margin has declined in the last couple of years.
EPAM has a Gross Margin of 28.92%. This is in the lower half of the industry: EPAM underperforms 62.50% of its industry peers.
In the last couple of years the Gross Margin of EPAM has declined.
| 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), EPAM is creating some value.
The number of shares outstanding for EPAM has been reduced compared to 1 year ago.
The number of shares outstanding for EPAM has been increased compared to 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 8.86. This indicates that EPAM is financially healthy and has little risk of bankruptcy at the moment.
EPAM has a Altman-Z score of 8.86. This is amongst the best in the industry. EPAM outperforms 90.91% 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.
The Debt to FCF ratio of EPAM (0.05) is better than 92.05% 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 82.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.05 | ||
| Altman-Z | 8.86 |
ROIC/WACC1.19
WACC8.98%
2.3 Liquidity
A Current Ratio of 3.02 indicates that EPAM has no problem at all paying its short term obligations.
The Current ratio of EPAM (3.02) is better 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 78.41% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.02 | ||
| Quick Ratio | 3.02 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 2.97% 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 14.89% yearly.
The Revenue has grown by 14.26% in the past year. This is quite good.
EPAM shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 15.56% yearly.
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
EPAM is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.17% yearly.
EPAM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.81% yearly.
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
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.
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 19.08, the valuation of EPAM can be described as rather expensive.
70.45% of the companies in the same industry are more expensive than EPAM, based on the Price/Earnings ratio.
EPAM's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.25.
The Price/Forward Earnings ratio is 16.68, which indicates a correct valuation of EPAM.
Compared to the rest of the industry, the Price/Forward Earnings ratio of EPAM indicates a somewhat cheap valuation: EPAM is cheaper than 71.59% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.98. EPAM is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.08 | ||
| Fwd PE | 16.68 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, EPAM is valued a bit cheaper than 65.91% of the companies in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as EPAM.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.49 | ||
| EV/EBITDA | 16.26 |
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)2.64
PEG (5Y)1.28
EPS Next 2Y8.1%
EPS Next 3Y9.19%
5. Dividend
5.1 Amount
EPAM does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
211.82
-0.11 (-0.05%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners100.2%
Inst Owner Change0.1%
Ins Owners3.62%
Ins Owner Change-0.21%
Market Cap11.70B
Revenue(TTM)5.30B
Net Income(TTM)371.62M
Analysts80
Price Target215.01 (1.51%)
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 | 19.08 | ||
| Fwd PE | 16.68 | ||
| P/S | 2.21 | ||
| P/FCF | 25.49 | ||
| P/OCF | 23.29 | ||
| P/B | 3.14 | ||
| P/tB | 5.58 | ||
| EV/EBITDA | 16.26 |
EPS(TTM)11.1
EY5.24%
EPS(NY)12.7
Fwd EY6%
FCF(TTM)8.31
FCFY3.92%
OCF(TTM)9.09
OCFY4.29%
SpS95.91
BVpS67.46
TBVpS37.97
PEG (NY)2.64
PEG (5Y)1.28
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 | 8.86 |
F-Score6
WACC8.98%
ROIC/WACC1.19
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 4 / 10 to EPAM SYSTEMS INC (EPAM). This can be considered as Fairly Valued.
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 19.08 and the Price/Book (PB) ratio is 3.14.