EPAM SYSTEMS INC (EPAM) Stock Fundamental Analysis
USA - NYSE:EPAM - US29414B1044 - Common Stock
144.52 USD
+2.32 (+1.63%)
144.52 USD
0 (0%)
Overall EPAM gets a fundamental rating of 6 out of 10. We evaluated EPAM against 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 is not valued too expensively and it also shows a decent growth rate.
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.
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
The Return On Assets of EPAM (8.52%) is better than 80.23% of its industry peers.
EPAM has a better Return On Equity (10.94%) than 67.44% of its industry peers.
EPAM has a better Return On Invested Capital (10.85%) than 75.58% of its industry peers.
EPAM had an Average Return On Invested Capital over the past 3 years of 11.98%. This is significantly below the industry average of 21.42%.
| 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
The Profit Margin of EPAM (7.91%) is better than 74.42% of its industry peers.
EPAM's Profit Margin has declined in the last couple of years.
EPAM has a better Operating Margin (10.91%) than 72.09% of its industry peers.
EPAM's Operating Margin has declined in the last couple of years.
EPAM has a Gross Margin of 30.05%. This is in the lower half of the industry: EPAM underperforms 61.63% 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
EPAM has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it 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.
EPAM has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 7.21 indicates that EPAM is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 7.21, EPAM belongs to the top of the industry, outperforming 86.05% of the companies in the same industry.
EPAM has a debt to FCF ratio of 0.06. This is a very positive value and a sign of high solvency as it would only need 0.06 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.06, EPAM belongs to the top of the industry, outperforming 93.02% 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 81.40% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.06 | ||
| Altman-Z | 7.21 |
ROIC/WACC1.25
WACC8.67%
2.3 Liquidity
A Current Ratio of 3.17 indicates that EPAM has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 3.17, EPAM belongs to the top of the industry, outperforming 80.23% of the companies in the same industry.
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.
Looking at the Quick ratio, with a value of 3.17, EPAM belongs to the top of the industry, outperforming 81.40% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.17 | ||
| Quick Ratio | 3.17 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.22% over the past year.
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.
Looking at the last year, EPAM shows a quite strong growth in Revenue. The Revenue has grown by 9.73% in the last year.
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)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
Based on estimates for the next years, EPAM will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.94% on average per year.
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 Y3.9%
EPS Next 2Y7.04%
EPS Next 3Y8.45%
EPS Next 5Y8.94%
Revenue Next Year15.27%
Revenue Next 2Y11.11%
Revenue Next 3Y10.45%
Revenue Next 5Y9.84%
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 12.97 indicates a correct valuation of EPAM.
Based on the Price/Earnings ratio, EPAM is valued cheaper than 80.23% of the companies in the same industry.
EPAM's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.40.
EPAM is valuated reasonably with a Price/Forward Earnings ratio of 11.60.
Based on the Price/Forward Earnings ratio, EPAM is valued cheaper than 80.23% of the companies in the same industry.
EPAM is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.94, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.97 | ||
| Fwd PE | 11.6 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, EPAM is valued a bit cheaper than 70.93% of the companies in the same industry.
EPAM's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. EPAM is cheaper than 66.28% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.65 | ||
| EV/EBITDA | 10.62 |
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)3.32
PEG (5Y)0.87
EPS Next 2Y7.04%
EPS Next 3Y8.45%
5. Dividend
5.1 Amount
No dividends for EPAM!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
144.52
+2.32 (+1.63%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners96.48%
Inst Owner Change-1.16%
Ins Owners3.6%
Ins Owner Change0.11%
Market Cap8.05B
Analysts80.87
Price Target218.1 (50.91%)
Short Float %3.48%
Short Ratio2.23
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)0.46%
PT rev (3m)-1.39%
EPS NQ rev (1m)0.11%
EPS NQ rev (3m)4.15%
EPS NY rev (1m)0.02%
EPS NY rev (3m)2.11%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.82%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)1.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.97 | ||
| Fwd PE | 11.6 | ||
| P/S | 1.59 | ||
| P/FCF | 19.65 | ||
| P/OCF | 17.91 | ||
| P/B | 2.19 | ||
| P/tB | 3.98 | ||
| EV/EBITDA | 10.62 |
EPS(TTM)11.14
EY7.71%
EPS(NY)12.45
Fwd EY8.62%
FCF(TTM)7.36
FCFY5.09%
OCF(TTM)8.07
OCFY5.59%
SpS91.04
BVpS65.85
TBVpS36.31
PEG (NY)3.32
PEG (5Y)0.87
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 | 0.04 | ||
| Cap/Depr | 36.56% | ||
| Cap/Sales | 0.79% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 67.9% | ||
| Profit Quality | 102.14% | ||
| Current Ratio | 3.17 | ||
| Quick Ratio | 3.17 | ||
| Altman-Z | 7.21 |
F-Score6
WACC8.67%
ROIC/WACC1.25
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)7.22%
EPS 3Y6.34%
EPS 5Y14.89%
EPS Q2Q%13.06%
EPS Next Y3.9%
EPS Next 2Y7.04%
EPS Next 3Y8.45%
EPS Next 5Y8.94%
Revenue 1Y (TTM)9.73%
Revenue growth 3Y7.95%
Revenue growth 5Y15.56%
Sales Q2Q%18.04%
Revenue Next Year15.27%
Revenue Next 2Y11.11%
Revenue Next 3Y10.45%
Revenue Next 5Y9.84%
EBIT growth 1Y11.21%
EBIT growth 3Y0.14%
EBIT growth 5Y12.45%
EBIT Next Year16.3%
EBIT Next 3Y12.45%
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%