Epam Systems (EPAM) AI Stock Analysis

• Market Cap: $12.18B
• Dividend Yield: N/A
• Average Volume (3M): 616.32K
• Price to Earnings (P/E): 33.3
• Beta (1Y): 1.10
• Revenue Growth: 14.26%
• EPS Growth: -15.49%
• Country: US
• Employees: 61,200
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 3.08
• Shares Outstanding: 55,242,620
• 10 Day Avg. Volume: 606,222
• 30 Day Avg. Volume: 616,322
• PEG Ratio: 2.95
• Price to Book (P/B): 3.69
• Price to Sales (P/S): 2.83
• P/FCF Ratio: 25.42
• Enterprise Value/Market Cap: 0.90
• Enterprise Value/Revenue: 2.07
• Enterprise Value/Gross Profit: 7.33
• Enterprise Value/Ebitda: 16.73
• 1Y Price Target: $228.00
• Price Target Upside: 4.57% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11
• EPS Forecast (FY): 12.53
• Revenue Forecast (FY): $5.82B

• Rating: 73 Outperform
• Price Target: $236.00 ▲(8.24% Upside)

The score is driven primarily by strong financial stability and solid operating performance, supported by constructive technical trend signals. Earnings call takeaways were positive on growth, AI momentum, and cash generation, but valuation is relatively expensive and margins face pressure, tempering the overall rating.

Positive Factors

Balance Sheet Strength

Extremely low leverage and a high equity ratio provide durable financial flexibility. This strength supports sustained investment in engineering and AI capabilities, funds buybacks or M&A without stressing liquidity, and cushions the business through industry cyclicality over the next several quarters.

AI Leadership & Partnerships

Deep internal AI training, product launches (AI/RUN Transform, Agentic QA) and growing AI-native revenues create a durable competitive moat. Skilled engineering plus strategic partnerships accelerates enterprise adoption, supports premium pricing, and positions revenue mix toward higher-growth, higher-value services.

Cash Flow Generation

Consistent FCF growth and cash conversion above net income signal strong underlying cash generation. Reliable cash flow sustains R&D and AI investments, funds capital returns like the $1B buyback, and provides long-term optionality for strategic acquisitions without over-levering.

Negative Factors

Gross Margin Compression

A multi-point decline in gross margin driven by higher variable compensation and weaker acquisition profitability is a structural headwind. Sustained margin erosion reduces operating leverage, limits reinvestment capacity, and could pressure free cash flow and returns if not reversed by pricing or efficiency gains.

Acquisition & Geographic Risk (NEORIS)

Integration setbacks and country-specific instability at NEORIS create durable execution and revenue risk. Customer disruption in Mexico undermines expected synergies, can depress margins, and increases operational complexity, making future inorganic growth less accretive until issues are resolved.

Profitability & Cash Conversion Decline

A falling net profit margin (from prior year levels) coupled with a drop in free-cash-flow-to-net-income weakens the company's ability to self-fund growth and returns. Persistent deterioration would constrain strategic flexibility and make sustaining higher R&D and sales investments more costly.

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 service offerings, which include consulting, software development, and systems integration for clients across diverse industries. The company operates on a time-and-materials basis, fixed-price contracts, and outcome-based pricing models, allowing flexibility in revenue generation. Key revenue streams include project-based services, ongoing support and maintenance contracts, and long-term partnerships with prominent enterprises. Additionally, EPAM benefits from strategic alliances with major technology platforms and vendors, enhancing its service capabilities and expanding its market reach. The company's focus on high-value, complex projects allows it to command premium pricing, contributing significantly to its overall earnings.

Epam Systems Financial Statement Overview

Summary

Solid overall fundamentals supported by a strong balance sheet (very low leverage and high equity ratio) and healthy operating profitability. Offsetting factors include net margin pressure versus last year and a slight decline in free cash flow relative to net income despite positive free cash flow growth.

Income Statement

Epam Systems shows a stable revenue growth rate of 4.47% in the TTM, with a solid gross profit margin of 30.03%. However, the net profit margin has decreased to 7.91% from 9.61% in the previous year, indicating some pressure on profitability. The EBIT and EBITDA margins are healthy at 10.63% and 13.56%, respectively, reflecting efficient operational management.

Balance Sheet

The company maintains a strong balance sheet with a low debt-to-equity ratio of 0.044, indicating low leverage and financial stability. Return on equity is at 11.07%, showing a moderate return on shareholder investments. The equity ratio stands at 76.92%, highlighting a robust equity base relative to total assets.

Cash Flow

Epam Systems demonstrates a positive free cash flow growth rate of 12.05% in the TTM, indicating improved cash generation. The operating cash flow to net income ratio is 1.35, suggesting strong cash flow relative to net income. However, the free cash flow to net income ratio has slightly decreased to 0.91, which may warrant monitoring.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.30B	4.73B	4.69B	4.82B	3.76B	2.66B
Gross Profit	1.50B	1.45B	1.43B	1.54B	1.27B	926.96M
EBITDA	656.59M	671.69M	659.86M	713.01M	680.27M	508.57M
Net Income	371.62M	454.53M	417.08M	419.42M	481.65M	327.16M
Balance Sheet
Total Assets	4.84B	4.75B	4.35B	4.01B	3.52B	2.72B
Cash, Cash Equivalents and Short-Term Investments	1.24B	1.29B	2.10B	1.74B	1.45B	1.38B
Total Debt	155.22M	163.25M	171.94M	193.22M	239.16M	266.40M
Total Liabilities	1.12B	1.12B	880.89M	1.01B	1.03B	738.31M
Stockholders Equity	3.73B	3.63B	3.47B	3.00B	2.49B	1.98B
Cash Flow
Free Cash Flow	459.11M	527.02M	534.22M	382.48M	460.83M	475.61M
Operating Cash Flow	502.30M	559.17M	562.63M	464.10M	572.33M	544.41M
Investing Cash Flow	-878.68M	-884.98M	-66.77M	-182.93M	-368.92M	-167.15M
Financing Cash Flow	-437.96M	-390.41M	-165.77M	-2.02M	-59.56M	-765.00K

Epam Systems Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 218.04
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 218.04 is above the 20-day moving average (MA) of 213.32, above the 50-day MA of 203.50, and above the 200-day MA of 174.20, indicating a bullish trend. The MACD of 4.11 indicates Positive momentum. The RSI at 57.27 is Neutral, neither overbought nor oversold. The STOCH value of 79.65 is Neutral, 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
INFY	80 Outperform	$75.86B	23.90	32.85%	2.58%	4.62%	1.06%
CTSH	79 Outperform	$41.32B	19.85	14.50%	1.46%	7.44%	-4.57%
ACN	79 Outperform	$172.72B	23.21	25.35%	2.25%	6.58%	1.19%
G	78 Outperform	$7.84B	14.66	22.32%	1.41%	7.40%	-14.45%
CACI	74 Outperform	$14.20B	27.54	13.18%	―	12.61%	11.85%
EPAM	73 Outperform	$12.18B	33.28	10.21%	―	14.26%	-15.49%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Epam Systems Corporate Events

EPAM Systems Announces 2026 Investor Day Focused on AI

On January 13, 2026, EPAM Systems announced it will host an Investor Day in Boston on March 12, 2026, where CEO and President Balazs Fejes, CFO Jason Peterson and other executives will present the company’s progress against long-term strategic priorities and outline its plans for sustained growth amid the next wave of AI-driven business transformation. The event, which will include presentations from clients and partners and demonstrations of real-life AI applications, underscores EPAM’s effort to highlight its differentiated AI-native engineering capabilities and deepen investor understanding of its role in helping enterprises accelerate digital and AI transformation; it will be available via live webcast and replay for stakeholders who cannot attend in person.

The most recent analyst rating on (EPAM) stock is a Buy with a $243.00 price target. To see the full list of analyst forecasts on Epam Systems stock, see the EPAM Stock Forecast page.

EPAM Systems Announces $1 Billion Stock Buyback Program

On October 21, 2025, EPAM Systems announced a new $1 billion stock repurchase program authorized by its Board of Directors. This initiative reflects the company’s confidence in its growth prospects and financial strength, as it aims to enhance shareholder value while continuing to invest in its business and AI agenda. The program, which spans 24 months, allows for flexibility in repurchasing shares based on market conditions and other factors.

The most recent analyst rating on (EPAM) stock is a Buy with a $205.00 price target. To see the full list of analyst forecasts on Epam Systems stock, see the EPAM Stock Forecast page.