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Epam Systems
(NYSE:EPAM)
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Rating:67Neutral
Price Target:
$101.00
▲(12.41% Upside)
Action:Downgraded
Date:08/07/26
EPAM scores as moderately attractive: strong financial stability (very low leverage) and reasonable valuation are the main positives. The score is held back by softer cash flow trends and margin compression, plus a cautious earnings outlook with lowered revenue guidance, weaker North America performance, and reduced free-cash-flow conversion expectations. Technicals also remain mixed with the stock still well below longer-term moving averages.
Positive Factors
Strong balance sheet and financial flexibility
Very low leverage limits financial risk and gives EPAM flexibility to invest in talent, AI capabilities, acquisitions, or shareholder returns while managing cyclical demand across enterprise technology services.
Negative Factors
Lowered growth outlook and delayed AI deal contribution
Reduced guidance signals weaker near-term demand visibility. Unsigned AI opportunities and long procurement cycles defer the revenue payoff from the company’s strategic repositioning, increasing execution and pipeline-conversion risk.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong balance sheet and financial flexibility
Very low leverage limits financial risk and gives EPAM flexibility to invest in talent, AI capabilities, acquisitions, or shareholder returns while managing cyclical demand across enterprise technology services.
Read all positive factors
Epam Systems Key Performance Indicators (KPIs)
Any
Revenue by Segment
Analyzes revenue from different business segments, highlighting which areas drive growth and profitability, and indicating strategic focus and market demand.
Analyzes revenue from different business segments, highlighting which areas drive growth and profitability, and indicating strategic focus and market demand.
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The Fly
The FlyEpam Systems (EPAM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.69B
Dividend YieldN/A
Average Volume (3M)1.70M
Price to Earnings (P/E)14.9
Beta (1Y)1.00
Revenue Growth10.76%
EPS Growth4.93%
CountryUS
Employees62,850
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)7.41
Shares Outstanding51,586,983
10 Day Avg. Volume1,322,088
30 Day Avg. Volume1,699,895
Financial Highlights & Ratios
PEG Ratio-2.05
Price to Book (P/B)3.11
Price to Sales (P/S)2.10
P/FCF Ratio18.69
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$115.80Price Target Upside28.88% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering16
EPS Forecast (FY)13.14
Revenue Forecast (FY)$5.65B
Epam Systems Business Overview & Revenue Model
Company Description
EPAM Systems, Inc. is a leading global provider of comprehensive digital platform engineering and software development solutions. The company's extensive service portfolio includes: Engineering Services: From initial requirements analysis and stra...
How the Company Makes Money
EPAM primarily makes money by providing contracted services to business customers (B2B) and recognizing revenue from time-and-materials (T&M) and fixed-price project arrangements for software engineering, consulting, and managed/ongoing delivery w...
Epam Systems Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Neutral
The call presented a mixed picture: the company beat quarterly expectations with solid revenue, margin expansion, EPS growth and notable AI momentum (AI-native revenues >$160M and strong partner certifications). However, meaningful headwinds remain — most notably underperformance in North America, softer Software & Hi-Tech and Media verticals, delayed cash conversion and a reduced full-year revenue outlook with key AI-led large deals expected to contribute mainly in 2027. Management outlined a multi-quarter go-to-market transformation to address execution gaps, but the near-term outlook is tempered by timing and pipeline-signing risk.Positive Updates
Revenue and Organic Growth
Q2 revenue of $1.415 billion, up 4.5% year-over-year on a reported basis and up 3.4% on an organic constant currency basis.
Negative Updates
North America Underperformance
Americas (57% of revenue) grew only 0.5% YoY; management flagged North America is 'not growing fast enough' and expects H2 to operate below expectations, attributing weakness to a faster-than-expected shift away from task-based services toward AI-led modernization and to go-to-market execution gaps.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue and Organic Growth
Q2 revenue of $1.415 billion, up 4.5% year-over-year on a reported basis and up 3.4% on an organic constant currency basis.
Read all positive updates
Company Guidance
EPAM lowered full‑year 2026 revenue growth to 3.2%–4.2% (organic constant‑currency 2%–3%) with an expected ~+1.2% FX benefit, and now forecasts GAAP income from operations of 10.5%–11% and non‑GAAP IFO of 15.5%–16%; GAAP tax rate ~27% and non‑GAAP tax rate ~24%; full‑year GAAP diluted EPS $8.22–$8.38 and non‑GAAP diluted EPS $13.08–$13.24 with ~52.2M weighted average diluted shares. Q3 revenue is guided to $1.410B–$1.425B (≈1.7% y/y at midpoint; organic cc ~1.8%; FX −0.1%), Q3 GAAP IFO 11%–12% and non‑GAAP IFO 15.5%–16.5%, Q3 GAAP EPS $2.33–$2.41 and non‑GAAP EPS $3.38–$3.46 with ~51.4M diluted shares. Management reiterated the $600M AI‑native 2026 target (Q2 AI‑native >$160M), expects 2026 free cash flow conversion ≈70% (vs. typical 80–90%) but >100% conversion in both Q3 and Q4, reported Q2 cash ≈$800M and DSO 82 days, and disclosed assumptions of stock‑based comp ≈$44M (Q3)/$45M (Q4), amortization ≈$17M/quarter, FX losses ≈$3M (Q3)/$1M (Q4), ~$14M tax effect of non‑GAAP adjustments each quarter, and continued Ukraine delivery productivity at 2025 levels.Epam Systems Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
88
Very Positive
Cash Flow
67
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.62B | 5.46B | 4.73B | 4.69B | 4.82B | 3.76B |
| Gross Profit | 1.59B | 1.45B | 1.45B | 1.43B | 1.54B | 1.27B |
| EBITDA | 684.81M | 630.43M | 711.52M | 659.86M | 647.31M | 680.27M |
| Net Income | 401.67M | 377.68M | 454.53M | 417.08M | 419.42M | 481.65M |
Balance Sheet | ||||||
| Total Assets | 4.57B | 4.90B | 4.75B | 4.35B | 4.01B | 3.52B |
| Cash, Cash Equivalents and Short-Term Investments | 789.40M | 1.30B | 1.29B | 2.10B | 1.74B | 1.45B |
| Total Debt | 152.24M | 143.70M | 163.25M | 171.94M | 193.22M | 239.16M |
| Total Liabilities | 1.05B | 1.22B | 1.12B | 880.89M | 1.01B | 1.03B |
| Stockholders Equity | 3.52B | 3.68B | 3.63B | 3.47B | 3.00B | 2.49B |
Cash Flow | ||||||
| Free Cash Flow | 482.64M | 612.69M | 527.02M | 534.22M | 382.48M | 460.83M |
| Operating Cash Flow | 538.79M | 654.93M | 559.17M | 562.63M | 464.10M | 572.33M |
| Investing Cash Flow | -57.68M | -49.05M | -884.98M | -66.77M | -182.93M | -368.92M |
| Financing Cash Flow | -722.98M | -651.20M | -390.41M | -165.77M | -2.02M | -59.56M |
Epam Systems Technical Analysis
Positive
89.85
Price Trends
92.44
Positive
102.22
Positive
141.26
Negative
Market Momentum
3.39
Negative
63.81
Neutral
84.30
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 89.85 is below the 20-day moving average (MA) of 102.67, below the 50-day MA of 92.44, and below the 200-day MA of 141.26, indicating a neutral trend. The MACD of 3.39 indicates Negative momentum. The RSI at 63.81 is Neutral, neither overbought nor oversold. The STOCH value of 84.30 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EPAM.
Epam Systems Risk Analysis
Epam Systems disclosed 37 risk factors in its most recent earnings report. Epam Systems reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Epam Systems Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $113.38B | 14.68 | 25.00% | 4.44% | 6.74% | -0.66% | |
81 Outperform | $6.24B | 10.92 | 22.91% | 2.29% | 6.89% | 11.22% | |
76 Outperform | $27.87B | 13.28 | 14.94% | 2.82% | 5.64% | -5.39% | |
75 Outperform | $14.31B | 26.66 | 12.68% | ― | 10.89% | 7.95% | |
75 Outperform | $47.49B | 14.29 | 33.03% | 4.71% | -0.64% | 5.69% | |
67 Neutral | $5.69B | 14.89 | 11.19% | ― | 10.76% | 4.93% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
EPAM
Epam Systems
110.34
-62.17
-36.04%
ACN
Accenture
185.28
-62.53
-25.23%
CACI
Caci International
647.39
162.58
33.53%
CTSH
Cognizant
61.87
-8.70
-12.32%
G
Genpact
37.14
-7.48
-16.77%
INFY
Infosys
11.94
-4.86
-28.94%
Epam Systems Corporate Events
Business Operations and StrategyRegulatory Filings and ComplianceShareholder Meetings
EPAM Systems Shareholders Back Equity Plans and Governance Changes
Positive
May 26, 2026
On May 21, 2026, EPAM Systems held its 2026 Annual Meeting of Stockholders, where investors approved sizeable increases to the company’s equity-based compensation plans, adding up to 4,000,000 additional shares to the 2025 Long Term Incentiv...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.