EPAM SYSTEMS INC (EPAM) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:EPAM - US29414B1044 - Common Stock
218.21 USD
-0.84 (-0.38%)
218.21 USD
0 (0%)
Taking everything into account, EPAM scores 5 out of 10 in our fundamental rating. EPAM was compared to 88 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. While showing a medium growth rate, EPAM is valued expensive at the moment.
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.
- In the past 5 years EPAM has always been profitable.
- EPAM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- With a decent Return On Assets value of 7.67%, EPAM is doing good in the industry, outperforming 77.27% of the companies in the same industry.
- EPAM's Return On Equity of 9.97% is fine compared to the rest 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 78.41% 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 29.06%.
| 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
- EPAM has a Profit Margin of 7.01%. This is in the better half of the industry: EPAM outperforms 69.32% of its industry peers.
- EPAM's Profit Margin has declined in the last couple of years.
- With a decent Operating Margin value of 10.43%, EPAM is doing good in the industry, outperforming 71.59% of the companies in the same industry.
- In the last couple of years the Operating Margin of EPAM has declined.
- With a Gross Margin value of 28.92%, EPAM is not doing good in the industry: 62.50% of the companies in the same industry are doing better.
- 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.
- EPAM has less shares outstanding than it did 1 year ago.
- Compared to 5 years ago, EPAM has more shares outstanding
- EPAM has a better debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 9.08 indicates that EPAM is not in any danger for bankruptcy at the moment.
- EPAM's Altman-Z score of 9.08 is amongst the best of the industry. EPAM outperforms 89.77% 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 has a better Debt to FCF ratio (0.05) than 92.05% 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.
- Looking at the Debt to Equity ratio, with a value of 0.01, EPAM belongs to the top of the industry, outperforming 82.95% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.05 | ||
| Altman-Z | 9.08 |
ROIC/WACC1.18
WACC9.07%
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's Current ratio of 3.02 is fine compared to the rest of the industry. EPAM outperforms 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's Quick ratio of 3.02 is fine compared to the rest 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
- The Earnings Per Share is expected to grow by 5.17% on average over the next years.
- 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 3Y10.53%
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
- A Price/Earnings ratio of 19.66 indicates a rather expensive valuation of EPAM.
- 67.05% of the companies in the same industry are more expensive than EPAM, based on the Price/Earnings ratio.
- The average S&P500 Price/Earnings ratio is at 27.21. EPAM is valued slightly cheaper when compared to this.
- Based on the Price/Forward Earnings ratio of 17.18, the valuation of EPAM can be described as rather expensive.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of EPAM indicates a somewhat cheap valuation: EPAM is cheaper than 68.18% of the companies listed in the same industry.
- EPAM's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 24.26.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.66 | ||
| Fwd PE | 17.18 |
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 is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.25 | ||
| EV/EBITDA | 16.88 |
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)2.72
PEG (5Y)1.32
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% |
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 19.66 and the Price/Book (PB) ratio is 3.23.