Epam Systems (EPAM) AI Stock Analysis

• Market Cap: $8.71B
• Dividend Yield: N/A
• Average Volume (3M): 847.30K
• Price to Earnings (P/E): 21.4
• Beta (1Y): 1.30
• Revenue Growth: 9.73%
• EPS Growth: -0.29%
• Country: US
• Employees: 61,200
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 2.77
• Shares Outstanding: 55,696,910
• 10 Day Avg. Volume: 914,805
• 30 Day Avg. Volume: 847,297
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.05
• Enterprise Value/Revenue: 1.80
• Enterprise Value/Gross Profit: 5.99
• Enterprise Value/Ebitda: 13.26
• 1Y Price Target: $208.45
• Price Target Upside: 37.28% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12

• Rating: 68 Neutral
• Price Target: $167.00 ▲(9.98% Upside)

EPAM's strong financial performance and positive earnings call sentiment are offset by bearish technical indicators and moderate valuation. The company's robust revenue growth and strategic focus on AI-driven transformation provide a positive outlook, but technical weakness and cash flow challenges present risks.

Positive Factors

Revenue Growth

The significant year-over-year revenue growth demonstrates EPAM's ability to expand its market presence and capitalize on its service offerings, indicating a strong demand for its digital transformation services.

AI-Driven Growth

The focus on AI-driven growth positions EPAM to leverage emerging technologies, enhancing its competitive edge and attracting major clients, which supports long-term revenue expansion.

Geographical and Vertical Expansion

EPAM's broad geographical and vertical expansion reduces dependency on any single market, fostering resilience and diversified growth opportunities across various sectors.

Negative Factors

Gross Margin Challenges

The decline in gross margin indicates potential cost pressures and challenges in maintaining profitability, which could impact long-term financial performance if not addressed.

Cash Flow Decline

A decline in cash flow generation can limit EPAM's ability to invest in growth initiatives and manage financial obligations, posing a risk to its financial flexibility.

Seasonal and Demand Pressures

Anticipated seasonal and demand pressures could lead to revenue volatility, affecting EPAM's ability to maintain consistent growth and profitability in the near term.

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 generates revenue primarily through its consulting and engineering services, which are billed on a time-and-materials or fixed-price basis. The company serves a diverse client base, including Fortune 500 companies, and benefits from long-term contracts that provide a stable revenue stream. Key revenue streams include custom software development, system integration, and digital platform services. Additionally, EPAM has established significant partnerships with major technology providers, such as AWS, Microsoft, and Google Cloud, which enhance its service offerings and attract new clients. The company's focus on innovation and delivery of high-quality services has also contributed to its revenue growth, as it helps clients navigate the complexities of digital transformation.

Epam Systems Financial Statement Overview

Summary

Epam Systems maintains a solid financial position with consistent revenue growth and strong profitability margins. The balance sheet reflects low leverage and a strong equity base, while cash flow management remains efficient despite recent declines in free cash flow growth.

Income Statement

Epam Systems shows a steady revenue growth rate of 4.25% in the TTM, indicating resilience in the competitive IT services industry. The gross profit margin of 30.03% and net profit margin of 7.91% reflect solid profitability, although slightly lower than previous years. The EBIT and EBITDA margins are stable at 8.16% and 13.12%, respectively, suggesting efficient operational management.

Balance Sheet

The company's balance sheet is strong with a low debt-to-equity ratio of 0.044, indicating minimal leverage and financial risk. The return on equity (ROE) is 11.07%, which, while slightly lower than previous years, still demonstrates effective use of equity. The equity ratio stands at 77.84%, highlighting a robust capital structure.

Cash Flow

Operating cash flow to net income ratio is 0.60, showing a healthy conversion of income to cash. However, the free cash flow growth rate is negative at -2.14%, indicating a decline in free cash flow generation. The free cash flow to net income ratio is strong at 0.91, suggesting efficient cash management despite recent challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.07B	4.73B	4.69B	4.82B	3.76B	2.66B
Gross Profit	1.52B	1.45B	1.43B	1.54B	1.27B	926.96M
EBITDA	687.65M	671.69M	659.86M	713.01M	680.27M	508.57M
Net Income	401.15M	454.53M	417.08M	419.42M	481.65M	327.16M
Balance Sheet
Total Assets	4.71B	4.75B	4.35B	4.01B	3.52B	2.72B
Cash, Cash Equivalents and Short-Term Investments	1.04B	1.29B	2.10B	1.74B	1.45B	1.38B
Total Debt	162.69M	163.25M	171.94M	193.22M	239.16M	266.40M
Total Liabilities	1.04B	1.12B	880.89M	1.01B	1.03B	738.31M
Stockholders Equity	3.67B	3.63B	3.47B	3.00B	2.49B	1.98B
Cash Flow
Free Cash Flow	409.73M	527.02M	534.22M	382.48M	460.83M	475.61M
Operating Cash Flow	449.58M	559.17M	562.63M	464.10M	572.33M	544.41M
Investing Cash Flow	-834.67M	-884.98M	-66.77M	-182.93M	-368.92M	-167.15M
Financing Cash Flow	-405.81M	-390.41M	-165.77M	-2.02M	-59.56M	-765.00K

Epam Systems Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 151.84
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 151.84 is below the 20-day moving average (MA) of 160.13, below the 50-day MA of 162.11, and below the 200-day MA of 188.52, indicating a bearish trend. The MACD of -3.53 indicates Positive momentum. The RSI at 39.36 is Neutral, neither overbought nor oversold. The STOCH value of 30.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EPAM.

Epam Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INFY	77 Outperform	67.87B	21.39	28.18%	3.07%	4.52%	-0.22%
G	76 Outperform	7.36B	13.87	20.81%	1.57%	7.37%	-14.64%
ACN	74 Outperform	148.84B	19.14	24.61%	2.48%	7.36%	6.18%
CTSH	74 Outperform	32.71B	13.54	15.93%	1.84%	6.34%	12.16%
CACI	70 Outperform	10.68B	21.73	12.84%	―	12.64%	19.79%
EPAM	68 Neutral	$8.71B	21.39	11.36%	―	9.73%	-0.29%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Epam Systems Corporate Events

EPAM Systems Appoints Balazs Fejes as New CEO

On August 27, 2025, EPAM Systems’ Board of Directors approved the transition of Arkadiy Dobkin to Executive Chairman and appointed Balazs Fejes as CEO and President, effective September 1, 2025. Mr. Fejes, who joined EPAM in 2004, will receive an annual base salary of $850,000 and a grant of restricted stock units valued at $670,000. The Board also amended the company’s bylaws to increase the maximum number of directors from ten to eleven, effective September 1, 2025.

The most recent analyst rating on (EPAM) stock is a Buy with a $199.00 price target. To see the full list of analyst forecasts on Epam Systems stock, see the EPAM Stock Forecast page.