Epam Systems (EPAM) AI Stock Analysis

• Market Cap: $11.29B
• Dividend Yield: N/A
• Average Volume (3M): 1.01M
• Price to Earnings (P/E): 31.6
• 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: 878,600
• 30 Day Avg. Volume: 1,011,019
• 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: 0.65
• Enterprise Value/Revenue: 1.38
• Enterprise Value/Gross Profit: 4.89
• Enterprise Value/Ebitda: 11.17
• 1Y Price Target: $210.67
• Price Target Upside: 1.76% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): 11.4
• Revenue Forecast (FY): $5.44B

• Rating: 70 Neutral
• Price Target: $223.00 ▲(7.72% Upside)

EPAM's overall stock score reflects a strong financial performance and positive earnings call, highlighting growth in AI initiatives and strategic advancements. However, technical indicators suggest the stock may be overbought, and the high P/E ratio indicates premium valuation expectations. The absence of a dividend yield and challenges in gross margins are also considerations.

Positive Factors

AI Initiatives

EPAM's focus on AI initiatives positions it as a leader in AI-native services, driving long-term growth and innovation in digital transformation.

Strong Cash Flow Generation

Robust cash flow generation enhances EPAM's ability to invest in growth opportunities and maintain financial flexibility, supporting long-term stability.

New AI Products on Google Cloud

The launch of AI products on Google Cloud expands EPAM's market reach and strengthens its competitive position in cloud-based AI solutions.

Negative Factors

Decreased Gross Margin

A declining gross margin indicates pressure on profitability, which could impact EPAM's ability to sustain its competitive pricing and operational efficiency.

Challenges with NEORIS Acquisition

Issues with the NEORIS acquisition may hinder EPAM's growth in certain markets, affecting its strategic expansion plans and revenue potential.

Impact of Seasonality on Q4 Outlook

Seasonality impacts can lead to revenue fluctuations, challenging EPAM's ability to maintain consistent growth and meet financial targets.

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

Epam Systems presents a solid financial performance with consistent revenue growth and strong operational efficiency. The balance sheet is robust with low leverage, providing financial stability. Cash flow generation is healthy, though there is a slight decline in free cash flow relative to net income. Overall, the company is well-positioned in the Information Technology Services industry, with a focus on maintaining profitability and 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: 207.02
• 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 207.02 is above the 20-day moving average (MA) of 196.81, above the 50-day MA of 175.38, and above the 200-day MA of 169.38, indicating a bullish trend. The MACD of 9.64 indicates Positive momentum. The RSI at 65.84 is Neutral, neither overbought nor oversold. The STOCH value of 55.55 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
CTSH	79 Outperform	$40.36B	19.39	14.50%	1.48%	7.44%	-4.57%
ACN	78 Outperform	$168.45B	22.63	25.35%	2.22%	6.58%	1.19%
CACI	78 Outperform	$12.38B	24.24	13.14%	―	12.61%	11.85%
G	78 Outperform	$8.27B	15.45	22.32%	1.42%	7.40%	-14.45%
INFY	76 Outperform	$71.99B	23.09	29.15%	2.63%	4.62%	1.06%
EPAM	70 Neutral	$11.29B	31.59	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 $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.

EPAM Systems Enters New $700 Million Credit Agreement

On October 3, 2025, EPAM Systems, Inc. entered into an amended and restated credit agreement with a syndicate of lenders, establishing a five-year $700 million revolving credit facility with PNC Bank, National Association serving as the administrative agent. This facility, which can potentially increase to $1.2 billion, replaces the 2021 credit facility and allows for unsecured borrowings in multiple currencies. The agreement includes various covenants and restrictions on additional indebtedness, asset dispositions, and acquisitions, with a focus on maintaining specific leverage ratios.