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. While EPAM has a great health rating, its profitability is only average at the moment. EPAM is valied quite expensively at the moment, while it does show a decent 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.
- In the past 5 years EPAM has always been profitable.
- Each year in the past 5 years EPAM had a positive operating cash flow.
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.
- The Return On Invested Capital of EPAM (10.71%) is better than 78.41% of its industry peers.
- The Average Return On Invested Capital over the past 3 years 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
- 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.
- In the last couple of years the Profit Margin of EPAM has declined.
- EPAM has a better Operating Margin (10.43%) than 71.59% of its industry peers.
- 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
- 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 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
- An Altman-Z score of 9.05 indicates that EPAM is not in any danger for bankruptcy at the moment.
- The Altman-Z score of EPAM (9.05) is better than 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's Debt to FCF ratio of 0.05 is amongst the best of the industry. EPAM outperforms 92.05% of its industry peers.
- 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/WACC1.18
WACC9.05%
2.3 Liquidity
- A Current Ratio of 3.02 indicates that EPAM has no problem at all paying 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'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
- EPAM shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.97%.
- Measured over the past years, EPAM shows a quite strong growth in Earnings Per Share. The EPS has been growing by 14.89% on average per year.
- The Revenue has grown by 14.26% in the past year. This is quite good.
- 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
- 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 Y7.3%
EPS Next 2Y8.24%
EPS Next 3Y9.28%
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
- With a Price/Earnings ratio of 19.66, EPAM is valued on the expensive side.
- Based on the Price/Earnings ratio, EPAM is valued a bit cheaper than 67.05% of the companies in the same industry.
- EPAM is valuated rather cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- Based on the Price/Forward Earnings ratio of 17.14, 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.
- The average S&P500 Price/Forward Earnings ratio is at 25.98. EPAM is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.66 | ||
| Fwd PE | 17.14 |
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 | 26.25 | ||
| 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)2.69
PEG (5Y)1.32
EPS Next 2Y8.24%
EPS Next 3Y9.28%
5. Dividend
5.1 Amount
- No dividends for EPAM!.
| 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.