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 quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- EPAM had positive earnings in the past year.
- 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
- 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.
- 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.
- EPAM has a Return On Invested Capital of 10.71%. This is in the better half of the industry: EPAM outperforms 78.41% of its industry peers.
- EPAM had an Average Return On Invested Capital over the past 3 years of 11.99%. This 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 better Profit Margin (7.01%) than 69.32% of its industry peers.
- In the last couple of years the Profit Margin of EPAM has declined.
- EPAM's Operating Margin of 10.43% is fine compared to the rest of the industry. EPAM outperforms 71.59% of its industry peers.
- EPAM's Operating Margin has declined in the last couple of years.
- Looking at the Gross Margin, with a value of 28.92%, EPAM is doing worse than 62.50% of the companies in the same industry.
- In the last couple of years the Gross Margin of EPAM has declined.
| 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.
- 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
- 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.
- 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 has a Debt to FCF ratio of 0.05. This is amongst the best in 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.
- The Debt to Equity ratio of EPAM (0.01) is better than 82.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.05 | ||
| Altman-Z | 9.08 |
ROIC/WACC1.18
WACC9.05%
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.
- The Current ratio of EPAM (3.02) is better 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.
- Looking at the Quick ratio, with a value of 3.02, EPAM is in the better half of the industry, outperforming 78.41% of the companies in the same industry.
| 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%.
- EPAM shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 14.89% yearly.
- EPAM shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.26%.
- 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 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
- 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 19.66, which indicates a rather expensive current 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.
- A Price/Forward Earnings ratio of 17.18 indicates a rather expensive valuation of EPAM.
- 68.18% of the companies in the same industry are more expensive than EPAM, based on the Price/Forward Earnings ratio.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.26, EPAM is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.66 | ||
| Fwd PE | 17.18 |
4.2 Price Multiples
- EPAM's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. EPAM is 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 | 16.88 |
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
- 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.