Epam Systems (EPAM) AI Stock Analysis

• Market Cap: $10.36B
• Dividend Yield: N/A
• Average Volume (3M): 800.12K
• Price to Earnings (P/E): 25.6
• Beta (1Y): 1.16
• Revenue Growth: 4.72%
• EPS Growth: -3.06%
• Country: US
• Employees: 61,200
• Sector: Technology
• Sector Strength: 87
• Industry: Information Technology Services
• EPS (TTM): 2.41
• Shares Outstanding: 56,652,702
• 10 Day Avg. Volume: 655,238
• 30 Day Avg. Volume: 800,122
• PEG Ratio: -3.18
• Price to Book (P/B): 6.26
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 49.09
• Enterprise Value/Market Cap: 1.67
• Enterprise Value/Revenue: 0.92
• Enterprise Value/Gross Profit: 11.96
• Enterprise Value/Ebitda: 6.59
• 1Y Price Target: $215.92
• Price Target Upside: 18.10% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 14

• Rating: 71 Outperform
• Price Target: $191.00 ▲(4.47%Upside)

Epam Systems demonstrates solid financial performance and strategic growth initiatives, particularly in AI capabilities, supporting a positive outlook. However, technical indicators and valuation suggest potential risks, with limited momentum and moderate overvaluation, presenting a balanced investment case.

Positive Factors

AI Revenue

Last quarter EPAM generated $50 million in pure-AI revenues, representing double-digit sequential growth.

Growth Drivers

Management expects financial services, technology, life sciences including medtech, and energy to drive growth for the year.

Leadership Change

EPAM announced a leadership change with Balazs Fejes becoming CEO, which is seen as a positive development.

Negative Factors

Long-term Challenges

There are longer-term concerns where growth and AOM will be challenged.

Pricing and Demand

Pricing is marginally better this year than last year but management’s tone was overall still muted on the ability to put through price increases given the demand backdrop.

Structural Concerns

Structural questions persist, including near-term risks that could drive worsening client spend if tariff uncertainty is not resolved soon.

Epam Systems Business Overview & Revenue Model

Company Description

EPAM Systems, Inc. provides digital platform engineering and software development services worldwide. The company offers engineering services, including requirements analysis and platform selection, customization, cross-platform migration, implementation, and integration; infrastructure management services, such as software development, testing, and maintenance with private, public, and mobile infrastructures for application, database, network, server, storage, and systems operations management, as well as monitoring, incident notification, and resolution services; and maintenance and support services. It also provides operation solutions comprising integrated engineering practices and smart automation; and optimization solutions that include software application testing, test management, automation, and consulting services to enable customers enhance their existing software testing and quality assurance practices, as well as other testing services that identify threats and close loopholes to protect its customers' business systems from information loss. In addition, the company offers business, experience, technology, data, and technical advisory consulting services; and digital and service design solutions, which comprise strategy, design, creative, and program management services, as well as physical product development, such as artificial intelligence, robotics, and virtual reality. It serves the financial services, travel and consumer, software and hi-tech, business information and media, life sciences and healthcare, and other industries. The company was founded in 1993 and is headquartered in Newtown, Pennsylvania.

How the Company Makes Money

EPAM Systems makes money primarily through its extensive range of IT services and consulting offerings. The company generates revenue by providing software engineering, technology consulting, and custom development services to a diverse client base spanning multiple industries. Key revenue streams include fees for time and materials, fixed-price contracts, and managed services agreements. EPAM's ability to attract and maintain long-term partnerships with major corporations contributes significantly to its earnings. The company also capitalizes on its global delivery model, leveraging a distributed workforce to optimize costs and deliver high-quality services. Additionally, strategic acquisitions expand EPAM's capabilities and market reach, further driving revenue growth.

Epam Systems Financial Statement Overview

Summary

Epam Systems demonstrates solid financial performance with strong gross and net profit margins, healthy EBIT and EBITDA margins, and a low debt-to-equity ratio. The company maintains sound financial health despite a decrease in free cash flow growth.

Income Statement

Epam Systems shows a strong financial performance in the TTM period with robust gross and net profit margins of 29.7% and 8.5%, respectively. The revenue growth rate from the previous year is 2.9%, indicating steady growth. EBIT and EBITDA margins are healthy at 10.9% and 13.9%, respectively, demonstrating efficient operational management. While the net profit margin decreased from 9.6% in the previous year, the overall income statement reflects a profitable and growing company.

Balance Sheet

The company maintains a solid balance sheet with a low debt-to-equity ratio of 0.04, indicating financial stability and low leverage. The return on equity is strong at 11.3%, and the equity ratio is high at 77.1%, suggesting a dominant equity position in its capital structure. The high stockholders' equity and low total debt position reflect sound financial health, though slight declines in equity ratio and ROE compared to previous years.

Cash Flow

Epam Systems exhibits strong cash flow management with a free cash flow to net income ratio of 1.02, indicating effective conversion of income to cash. However, the free cash flow growth rate shows a decline of 20.6% compared to the previous year, suggesting potential challenges in cash generation. The operating cash flow to net income ratio remains robust at 1.10, reflecting efficient cash operations despite reduced free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.86B	4.73B	4.69B	4.82B	3.76B	2.66B
Gross Profit	1.45B	1.45B	1.32B	1.54B	1.27B	926.96M
EBITDA	675.00M	671.69M	669.29M	713.01M	616.79M	508.57M
Net Income	411.77M	454.53M	417.08M	419.42M	481.65M	327.16M
Balance Sheet
Total Assets	4.72B	4.75B	4.35B	4.01B	3.52B	2.72B
Cash, Cash Equivalents and Short-Term Investments	1.17B	1.29B	2.10B	1.74B	1.45B	1.38B
Total Debt	158.14M	163.25M	171.94M	193.22M	239.16M	266.40M
Total Liabilities	1.08B	1.12B	880.89M	1.01B	1.03B	738.31M
Stockholders Equity	3.64B	3.63B	3.47B	3.00B	2.49B	1.98B
Cash Flow
Free Cash Flow	418.68M	527.02M	534.22M	382.48M	460.83M	475.61M
Operating Cash Flow	453.41M	559.17M	562.63M	464.10M	572.33M	544.41M
Investing Cash Flow	-839.30M	-884.98M	-66.77M	-182.93M	-368.92M	-167.15M
Financing Cash Flow	-427.84M	-390.41M	-165.77M	-2.02M	-59.56M	-765.00K

Epam Systems Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 182.83
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EPAM, the sentiment is Positive. The current price of 182.83 is above the 20-day moving average (MA) of 174.18, above the 50-day MA of 172.73, and below the 200-day MA of 202.84, indicating a neutral trend. The MACD of 1.42 indicates Negative momentum. The RSI at 62.87 is Neutral, neither overbought nor oversold. The STOCH value of 89.26 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EPAM.

Epam Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
G	76 Outperform	$8.03B	15.63	22.21%	1.48%	7.31%	-15.86%
WNS	76 Outperform	$3.03B	16.83	21.21%	―	-0.64%	30.96%
CACI	75 Outperform	$10.75B	23.08	13.48%	―	14.16%	22.25%
EXLS	72 Outperform	$7.37B	34.19	23.81%	―	14.18%	21.49%
EPAM	71 Outperform	$10.36B	25.56	11.57%	―	4.72%	-3.06%
Sector *	69 Neutral	¥228.59B	14.33	7.64%	2.71%	9.13%	8.49%
GLOB	68 Neutral	$4.04B	26.44	7.97%	―	11.90%	-11.15%

Epam Systems Corporate Events

EPAM Systems Approves Executive Severance Plan

On June 23, 2025, EPAM Systems, Inc. announced the approval of an Executive Severance Plan by its Board’s Compensation Committee. This plan outlines severance payments and benefits for executive officers in case of qualifying employment terminations. The plan includes provisions for cash payments, COBRA premium reimbursements, and accelerated vesting of stock awards, with additional benefits in the event of a change in control. The plan’s implications include potential excise tax under Section 4999 of the Internal Revenue Code, affecting the net benefits for participants.

The most recent analyst rating on (EPAM) stock is a Buy with a $237.00 price target. To see the full list of analyst forecasts on Epam Systems stock, see the EPAM Stock Forecast page.

EPAM Systems Approves Key Proposals at Annual Meeting

On May 22, 2025, EPAM Systems, Inc. held its Annual Meeting of Stockholders, where several key proposals were approved. The stockholders approved the 2025 Long Term Incentive Plan, replacing the 2015 Plan, and amendments to the company’s Charter and Bylaws, including the declassification of the Board and reduction of supermajority vote requirements. These changes are aimed at enhancing corporate governance and aligning with shareholder interests.

The most recent analyst rating on (EPAM) stock is a Buy with a $237.00 price target. To see the full list of analyst forecasts on Epam Systems stock, see the EPAM Stock Forecast page.

EPAM Systems Announces Leadership Transition with New CEO

On May 8, 2025, EPAM Systems announced a leadership transition with CEO Arkadiy Dobkin moving to Executive Chairman and Balazs Fejes stepping in as CEO and President effective September 1, 2025. The company reported strong first-quarter 2025 results with revenues of $1.302 billion, an 11.7% increase year-over-year, and raised its full-year revenue growth outlook to 11.5% to 14.5%. Despite a decrease in GAAP income from operations and diluted EPS, EPAM highlighted its unique differentiation in supporting client transformations amidst a dynamic macroeconomic landscape.