Epam Systems (EPAM) AI Stock Analysis

• Market Cap: $9.57B
• Dividend Yield: N/A
• Average Volume (3M): 591.58K
• Price to Earnings (P/E): 23.9
• Beta (1Y): 1.17
• Revenue Growth: 4.72%
• EPS Growth: -3.06%
• Country: US
• Employees: 61,200
• Sector: Technology
• Sector Strength: 90
• Industry: Information Technology Services
• EPS (TTM): 2.41
• Shares Outstanding: 56,652,702
• 10 Day Avg. Volume: 622,776
• 30 Day Avg. Volume: 591,584
• PEG Ratio: -2.50
• Price to Book (P/B): 2.56
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 22.26
• Enterprise Value/Market Cap: 0.86
• Enterprise Value/Revenue: 0.44
• Enterprise Value/Gross Profit: 5.69
• Enterprise Value/Ebitda: 3.13
• 1Y Price Target: $209.67
• Price Target Upside: 22.80% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 74 Outperform
• Price Target: $190.00 ▲(11.28%Upside)

EPAM Systems shows robust financial performance and strategic growth in AI capabilities, leading to a strong earnings call result. However, technical analysis reveals bearish trends, and valuation remains moderate. The leadership transition and raised guidance are positive, but challenges in cash flow and margins temper the overall optimism.

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

Inorganic Growth Concerns

Lower-than-expected inorganic contribution suggests a temporary supply and demand imbalance.

Pricing Challenges

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 Risks

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. is a global provider of digital platform engineering and software development services. Established in 1993, the company operates in sectors such as healthcare, financial services, travel and consumer, software and hi-tech, and media and entertainment. EPAM is renowned for its expertise in delivering innovative solutions that integrate advanced technology with a deep understanding of business processes, thereby helping its clients achieve operational efficiency and digital transformation.

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 steady revenue growth and strong profitability. The company maintains a low debt-to-equity ratio and a strong equity position, though cash flow generation has faced some decline.

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

Epam Systems Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 170.74
• 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 170.74 is below the 20-day moving average (MA) of 172.90, below the 50-day MA of 174.61, and below the 200-day MA of 200.77, indicating a bearish trend. The MACD of -1.61 indicates Positive momentum. The RSI at 48.97 is Neutral, neither overbought nor oversold. The STOCH value of 72.16 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
WNS	78 Outperform	$3.21B	19.92	21.24%	―	1.94%	26.19%
G	77 Outperform	$7.88B	15.34	22.21%	1.42%	7.31%	-15.86%
CACI	76 Outperform	$10.51B	22.64	13.48%	―	14.16%	22.25%
EPAM	74 Outperform	$9.57B	23.87	11.57%	―	4.72%	-3.06%
EXLS	73 Outperform	$6.97B	32.37	23.81%	―	14.18%	21.49%
GLOB	68 Neutral	$3.91B	26.77	7.97%	―	11.90%	-11.15%
Sector *	63 Neutral	$34.70B	5.15	-11.38%	1.67%	5.54%	-17.15%

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.