EPAM SYSTEMS INC (EPAM) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:EPAM - US29414B1044 - Common Stock
190.42 USD
+3.42 (+1.83%)
191 USD
+0.58 (+0.3%)
EPAM gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 85 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.
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 77.65% of the companies in the same industry.
EPAM has a Return On Equity of 9.97%. This is in the better half of the industry: EPAM outperforms 64.71% of its industry peers.
EPAM has a Return On Invested Capital of 10.71%. This is in the better half of the industry: EPAM outperforms 75.29% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for EPAM is significantly below the industry average of 29.77%.
| 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)11.98%
ROIC(5y)12.84%
1.3 Margins
EPAM has a Profit Margin of 7.01%. This is in the better half of the industry: EPAM outperforms 70.59% of its industry peers.
In the last couple of years the Profit Margin of EPAM has declined.
Looking at the Operating Margin, with a value of 10.43%, EPAM is in the better half of the industry, outperforming 70.59% of the companies in the same industry.
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 63.53% 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-7.24%
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.
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 8.23 indicates that EPAM is not in any danger for bankruptcy at the moment.
EPAM has a better Altman-Z score (8.23) than 89.41% 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 92.94% 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 81.18% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.05 | ||
| Altman-Z | 8.23 |
ROIC/WACC1.24
WACC8.67%
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 has a better Current ratio (3.02) than 80.00% of its industry peers.
A Quick Ratio of 3.02 indicates that EPAM has no problem at all paying its short term obligations.
The Quick ratio of EPAM (3.02) is better than 81.18% 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.
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.
EPAM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.81% yearly.
EPS Next Y4.42%
EPS Next 2Y6.78%
EPS Next 3Y8.14%
EPS Next 5Y5.17%
Revenue Next Year15.23%
Revenue Next 2Y11.14%
Revenue Next 3Y10.23%
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.
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
The Price/Earnings ratio is 17.15, which indicates a rather expensive current valuation of EPAM.
Compared to the rest of the industry, the Price/Earnings ratio of EPAM indicates a somewhat cheap valuation: EPAM is cheaper than 69.41% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of EPAM to the average of the S&P500 Index (26.11), we can say EPAM is valued slightly cheaper.
With a Price/Forward Earnings ratio of 15.36, EPAM is valued correctly.
Compared to the rest of the industry, the Price/Forward Earnings ratio of EPAM indicates a somewhat cheap valuation: EPAM is cheaper than 72.94% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of EPAM to the average of the S&P500 Index (36.21), we can say EPAM is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.15 | ||
| Fwd PE | 15.36 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of EPAM indicates a somewhat cheap valuation: EPAM is cheaper than 67.06% of the companies listed in the same industry.
EPAM's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.91 | ||
| EV/EBITDA | 14.43 |
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)3.88
PEG (5Y)1.15
EPS Next 2Y6.78%
EPS Next 3Y8.14%
5. Dividend
5.1 Amount
EPAM does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
190.42
+3.42 (+1.83%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners96.48%
Inst Owner Change1.94%
Ins Owners3.6%
Ins Owner Change-0.22%
Market Cap10.52B
Revenue(TTM)5.30B
Net Income(TTM)371.62M
Analysts80
Price Target211.82 (11.24%)
Short Float %5.33%
Short Ratio3.3
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)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)-2.88%
PT rev (3m)-3.24%
EPS NQ rev (1m)8.64%
EPS NQ rev (3m)9.23%
EPS NY rev (1m)0.06%
EPS NY rev (3m)0.52%
Revenue NQ rev (1m)1%
Revenue NQ rev (3m)1.07%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.15 | ||
| Fwd PE | 15.36 | ||
| P/S | 1.99 | ||
| P/FCF | 22.91 | ||
| P/OCF | 20.94 | ||
| P/B | 2.82 | ||
| P/tB | 5.01 | ||
| EV/EBITDA | 14.43 |
EPS(TTM)11.1
EY5.83%
EPS(NY)12.39
Fwd EY6.51%
FCF(TTM)8.31
FCFY4.36%
OCF(TTM)9.09
OCFY4.78%
SpS95.91
BVpS67.46
TBVpS37.97
PEG (NY)3.88
PEG (5Y)1.15
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)11.98%
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%
ROICexgc growth 3Y-11.88%
ROICexgc 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 Turnover1.09
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 | 8.23 |
F-Score6
WACC8.67%
ROIC/WACC1.24
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 Y4.42%
EPS Next 2Y6.78%
EPS Next 3Y8.14%
EPS Next 5Y5.17%
Revenue 1Y (TTM)14.26%
Revenue growth 3Y7.95%
Revenue growth 5Y15.56%
Sales Q2Q%19.43%
Revenue Next Year15.23%
Revenue Next 2Y11.14%
Revenue Next 3Y10.23%
Revenue Next 5Y7.81%
EBIT growth 1Y3.34%
EBIT growth 3Y0.14%
EBIT growth 5Y12.45%
EBIT Next Year16.3%
EBIT Next 3Y12.45%
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 of EPAM SYSTEMS INC (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.
Can you provide the expected EPS growth for EPAM stock?
The Earnings per Share (EPS) of EPAM SYSTEMS INC (EPAM) is expected to grow by 4.42% in the next year.