EPAM SYSTEMS INC (EPAM) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:EPAM - US29414B1044 - Common Stock
218.38 USD
+11.77 (+5.7%)
218.38 USD
0 (0%)
EPAM gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 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.
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.
With a decent Return On Equity value of 9.97%, EPAM is doing good in the industry, outperforming 65.91% of the companies in the same industry.
EPAM has a Return On Invested Capital of 10.71%. This is in the better half of the industry: EPAM outperforms 77.27% of its industry peers.
The Average Return On Invested Capital over the past 3 years 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
EPAM has a better Profit Margin (7.01%) than 69.32% of its industry peers.
EPAM's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 10.43%, EPAM is in the better half of 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.
EPAM's Gross Margin of 28.92% is on the low side compared to the rest of the industry. EPAM is outperformed by 62.50% of its industry peers.
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.
Compared to 1 year ago, EPAM has less shares outstanding
EPAM has more shares outstanding than it did 5 years ago.
The debt/assets ratio for EPAM has been reduced compared to a year ago.
2.2 Solvency
EPAM has an Altman-Z score of 8.71. This indicates that EPAM is financially healthy and has little risk of bankruptcy at the moment.
EPAM has a better Altman-Z score (8.71) than 90.91% of its industry peers.
EPAM has a debt to FCF ratio of 0.05. This is a very positive value and a sign of high solvency as it would only need 0.05 years to pay back of 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.
EPAM has a Debt/Equity ratio of 0.01. This is a healthy value indicating a solid balance between debt and equity.
With an excellent Debt to Equity ratio value of 0.01, EPAM belongs to the best 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 | 8.71 |
ROIC/WACC1.17
WACC9.14%
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.
A Quick Ratio of 3.02 indicates that EPAM has no problem at all paying its short term obligations.
EPAM has a Quick ratio of 3.02. This is in the better half of the industry: EPAM outperforms 79.55% 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%.
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 14.26% in the last year.
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
The Earnings Per Share is expected to grow by 5.17% on average over the next years.
The Revenue is expected to grow by 7.81% on average over the next years.
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
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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
Based on the Price/Earnings ratio of 19.67, the valuation of EPAM can be described as rather expensive.
Based on the Price/Earnings ratio, EPAM is valued a bit cheaper than 70.45% of the companies in the same industry.
EPAM's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.17.
Based on the Price/Forward Earnings ratio of 17.19, the valuation of EPAM can be described as rather expensive.
Based on the Price/Forward Earnings ratio, EPAM is valued a bit cheaper than the industry average as 70.45% of the companies are valued more expensively.
EPAM is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 23.79, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.67 | ||
| Fwd PE | 17.19 |
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 | 26.28 | ||
| EV/EBITDA | 15.82 |
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)2.72
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% |
218.38
+11.77 (+5.7%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners100.2%
Inst Owner Change0%
Ins Owners3.62%
Ins Owner Change-0.21%
Market Cap12.06B
Revenue(TTM)5.30B
Net Income(TTM)371.62M
Analysts80
Price Target215.01 (-1.54%)
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 | 19.67 | ||
| Fwd PE | 17.19 | ||
| P/S | 2.28 | ||
| P/FCF | 26.28 | ||
| P/OCF | 24.02 | ||
| P/B | 3.24 | ||
| P/tB | 5.75 | ||
| EV/EBITDA | 15.82 |
EPS(TTM)11.1
EY5.08%
EPS(NY)12.7
Fwd EY5.82%
FCF(TTM)8.31
FCFY3.81%
OCF(TTM)9.09
OCFY4.16%
SpS95.91
BVpS67.46
TBVpS37.97
PEG (NY)2.72
PEG (5Y)1.32
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 | 8.71 |
F-Score6
WACC9.14%
ROIC/WACC1.17
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 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 19.67 and the Price/Book (PB) ratio is 3.24.