Epam Systems Inc (EPAM)
NYSE:EPAM
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Epam Systems
(NYSE:EPAM)
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Rating:68Neutral
Price Target:
$124.00
▼(-5.59% Downside)
Action:DowngradedDate:04/02/26
The score is driven primarily by strong financial quality (low leverage and robust free cash flow) and a constructive earnings outlook emphasizing AI-native growth and margin improvement. These positives are tempered by weak technicals (price below key moving averages with negative MACD) and a relatively high P/E without dividend support.
Positive Factors
Conservative Balance Sheet
Extremely low leverage and a growing equity base give EPAM durable financial flexibility. This conservatism supports continued investment in AI capabilities, cushion against cyclical IT spending, and the ability to execute buybacks or M&A without stressing liquidity or credit capacity.
Negative Factors
Slowing Top-Line & Margin Compression
Multi-year revenue deceleration and a step-down in gross and net margins erode return on capital and limit reinvestment capacity. Restoring historic profitability requires sustained pricing power, mix shift to higher-value services, or efficiency gains amid competitive pricing pressure.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative Balance Sheet
Extremely low leverage and a growing equity base give EPAM durable financial flexibility. This conservatism supports continued investment in AI capabilities, cushion against cyclical IT spending, and the ability to execute buybacks or M&A without stressing liquidity or credit capacity.
Read all positive factors
Epam Systems (EPAM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.00B
Dividend YieldN/A
Average Volume (3M)1.26M
Price to Earnings (P/E)30.3
Beta (1Y)1.09
Revenue Growth15.42%
EPS Growth-14.70%
CountryUS
Employees61,200
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)3.26
Shares Outstanding52,756,847
10 Day Avg. Volume1,499,654
30 Day Avg. Volume1,257,548
Financial Highlights & Ratios
PEG Ratio-2.06
Price to Book (P/B)3.11
Price to Sales (P/S)2.10
P/FCF Ratio18.69
Enterprise Value/Market Cap0.80
Enterprise Value/Revenue0.88
Enterprise Value/Gross Profit3.12
Enterprise Value/Ebitda7.29
Forecast
1Y Price Target
$192.58Price Target Upside46.63% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
EPS Forecast (FY)12.77
Revenue Forecast (FY)$5.79B
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, impleme...
How the Company Makes Money
EPAM primarily makes money by providing services to business customers under fee-based arrangements for software engineering and digital transformation work. The core revenue stream is professional services billed to clients via (1) time-and-mater...
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.
Data provided by:
The Fly
The FlyEpam Systems Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 07, 2026
Earnings Call Sentiment Positive
The call presented a majority of positive operational and financial signals: solid Q4 outperformance, strong cash generation, accelerating AI‑native revenues with a stated target to scale AI-native services to >$600M in 2026, meaningful industry recognitions, and continued share repurchases. Headwinds were highlighted but largely tactical or transitional: modest gross margin pressure from higher variable comp, temporary utilization impacts due to pyramid re-shaping and vacations, a concentration-related decline from a Neoris client that drags ~1 percentage point off 2026 organic growth, and longer sales cycles associated with larger AI programs. Management provided constructive 2026 guidance that targets margin improvement and continued investment in AI and go-to-market, while acknowledging near-term shape risk (Q1) and a conservative view on visibility. On balance, the positive catalysts (AI momentum, cash flow, partnerships, awards, revenue growth and clear guidance) outweigh the contained operational challenges and client-specific headwinds.Positive Updates
Q4 Revenue Outperformance
Q4 2025 revenues exceeded $1,400,000,000, up 12.8% year-over-year on a reported basis and up 5.6% on an organic constant currency basis, beating the high end of Q4 revenue outlook.
Negative Updates
Gross Margin and Operating Margin Pressure (YoY)
Q4 GAAP gross margin was 30.1% (down from 30.4% in Q4 2024) and non-GAAP gross margin was 31.7% (down from 32.2% prior year). Non-GAAP operating margin in Q4 declined to 16.3% from 16.7% a year ago, with higher variable compensation cited as a primary driver.
Read all updates
Q4-2025 Updates
Positive
Negative
Q4 Revenue Outperformance
Q4 2025 revenues exceeded $1,400,000,000, up 12.8% year-over-year on a reported basis and up 5.6% on an organic constant currency basis, beating the high end of Q4 revenue outlook.
Read all positive updates
Company Guidance
EPAM’s 2026 guidance calls for full‑year revenue growth of 4.5%–7.5% (organic constant‑currency 3%–6% after an expected +1.5% FX tailwind and with ~100 bps headwind from Neoris’ largest client), GAAP operating margin of 10%–11% and non‑GAAP operating margin of 15%–16%, GAAP diluted EPS $7.95–$8.25 and non‑GAAP diluted EPS $12.60–$12.90 on ~54.4M weighted average diluted shares; Q1 2026 guidance is $1,385M–$1,400M revenue (≈3% organic constant‑currency at the midpoint after ~4% FX benefit and a mid‑single‑digit sequential decline from the Neoris client), GAAP op margin 7%–8% and non‑GAAP op margin 13.5%–14.5%, GAAP EPS $1.32–$1.40 and non‑GAAP EPS $2.70–$2.78 on ~54.7M diluted shares, with GAAP tax ~30% (non‑GAAP ~24%); key assumptions include ~$202M stock‑based comp for the year (Q1 $53M), ~$69M amortization (Q1 $18M), ~$70M tax‑effective non‑GAAP adjustments (Q1 $19M), ~$3M FX loss per quarter, $14M Q1 cost‑optimization charges, $12M interest & other income for the year (Q1 $3M), an expectation to maintain Ukraine productivity, a targeted ~80%–90% free‑cash‑flow conversion range for 2026, and continued share repurchases.Epam Systems Financial Statement Overview
Summary
Income Statement
70
Positive
Balance Sheet
88
Very Positive
Cash Flow
84
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 5.46B | 4.73B | 4.69B | 4.82B | 3.76B |
| Gross Profit | 1.45B | 1.45B | 1.43B | 1.54B | 1.27B |
| EBITDA | 630.43M | 671.69M | 659.86M | 713.01M | 680.27M |
| Net Income | 377.68M | 454.53M | 417.08M | 419.42M | 481.65M |
Balance Sheet | |||||
| Total Assets | 4.90B | 4.75B | 4.35B | 4.01B | 3.52B |
| Cash, Cash Equivalents and Short-Term Investments | 1.30B | 1.29B | 2.10B | 1.74B | 1.45B |
| Total Debt | 143.70M | 163.25M | 171.94M | 193.22M | 239.16M |
| Total Liabilities | 1.22B | 1.12B | 880.89M | 1.01B | 1.03B |
| Stockholders Equity | 3.68B | 3.63B | 3.47B | 3.00B | 2.49B |
Cash Flow | |||||
| Free Cash Flow | 612.69M | 527.02M | 534.22M | 382.48M | 460.83M |
| Operating Cash Flow | 654.93M | 559.17M | 562.63M | 464.10M | 572.33M |
| Investing Cash Flow | -49.05M | -884.98M | -66.77M | -182.93M | -368.92M |
| Financing Cash Flow | -651.20M | -390.41M | -165.77M | -2.02M | -59.56M |
Epam Systems Technical Analysis
Negative
131.34
Price Trends
142.62
Negative
174.45
Negative
168.63
Negative
Market Momentum
-4.81
Negative
44.54
Neutral
41.47
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EPAM, the sentiment is Negative. The current price of 131.34 is below the 20-day moving average (MA) of 132.10, below the 50-day MA of 142.62, and below the 200-day MA of 168.63, indicating a bearish trend. The MACD of -4.81 indicates Negative momentum. The RSI at 44.54 is Neutral, neither overbought nor oversold. The STOCH value of 41.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EPAM.
Epam Systems Risk Analysis
Epam Systems disclosed 36 risk factors in its most recent earnings report. Epam Systems reported the most risks in the "Tech & Innovation" 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 |
|---|---|---|---|---|---|---|---|
74 Outperform | $109.72B | 17.31 | 24.82% | 2.25% | 7.27% | 0.49% | |
73 Outperform | $5.90B | 14.72 | 21.81% | 1.41% | 6.60% | 10.28% | |
73 Outperform | $50.52B | 14.68 | 31.77% | 2.58% | 4.85% | 6.19% | |
71 Outperform | $25.07B | 17.90 | 14.79% | 1.46% | 6.55% | -3.10% | |
68 Neutral | $6.00B | 30.32 | 10.27% | ― | 15.42% | -14.70% | |
64 Neutral | $11.48B | 23.00 | 13.15% | ― | 9.58% | 14.11% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
EPAM
Epam Systems
113.78
-46.58
-29.05%
ACN
Accenture
178.71
-118.86
-39.94%
CACI
Caci International
519.54
56.37
12.17%
CTSH
Cognizant
52.90
-23.44
-30.70%
G
Genpact
34.75
-14.15
-28.93%
INFY
Infosys
12.46
-4.98
-28.56%
Epam Systems Corporate Events
Executive/Board Changes
EPAM Systems Grants Retention RSUs to Senior Executive
Positive
Apr 1, 2026
On March 31, 2026, EPAM Systems, Inc. granted restricted stock units valued at $3 million to Viktar Dvorkin, its Senior Vice President, Global Head of Advanced Engineering, Cloud Enterprise Platforms. The equity award, issued under the company...
Business Operations and StrategyFinancial Disclosures
EPAM Systems Showcases AI-Native Enterprise Transformation Strategy
Positive
Mar 12, 2026
EPAM Systems will hold its Investor Day on March 12, 2026, with CEO Balazs Fejes, CFO Jason Peterson and other leaders outlining a strategic transformation toward becoming a global leader in AI-native enterprise transformation services. The event,...
Business Operations and StrategyStock BuybackPrivate Placements and Financing
EPAM Systems Announces $300 Million Share Repurchase Agreement
Positive
Mar 5, 2026
On March 4, 2026, EPAM Systems entered into a $300 million fixed-dollar accelerated share repurchase agreement with Morgan Stanley under its existing $1.0 billion buyback authorization, funding the transaction with cash on hand and borrowings unde...
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.