Epam Systems (EPAM) AI Stock Analysis

• Market Cap: $10.00B
• Dividend Yield: N/A
• Average Volume (3M): 950.51K
• Price to Earnings (P/E): 24.6
• Beta (1Y): 1.14
• Revenue Growth: 4.72%
• EPS Growth: -3.06%
• Country: US
• Employees: 61,200
• Sector: Technology
• Sector Strength: 79
• Industry: Information Technology Services
• EPS (TTM): 2.41
• Shares Outstanding: 56,652,702
• 10 Day Avg. Volume: 1,082,747
• 30 Day Avg. Volume: 950,511
• PEG Ratio: -3.18
• Price to Book (P/B): 6.26
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 49.09
• Enterprise Value/Market Cap: 1.73
• Enterprise Value/Revenue: 0.92
• Enterprise Value/Gross Profit: 11.96
• Enterprise Value/Ebitda: 6.59
• 1Y Price Target: $215.46
• Price Target Upside: 26.18% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 14

• Rating: 75 Outperform
• Price Target: $198.00 ▲(15.96%Upside)

EPAM Systems scores a 75, driven by strong financial performance and positive earnings call highlights. The company's strategic focus on AI and leadership transition enhance its growth prospects. However, technical indicators and valuation suggest cautious optimism, with attention needed on cash flow challenges.

Positive Factors

AI Revenue Impact

Last quarter EPAM generated $50 million in pure-AI revenues, representing double-digit sequential growth.

Revenue Growth

Management expects financial services, technology, life sciences including medtech, and energy to drive growth for the year.

Negative Factors

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 strong gross and net profit margins, healthy EBIT and EBITDA margins, and a low debt-to-equity ratio. The company maintains sound financial health despite a decrease in free cash flow growth.

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
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
4.86B	4.73B	4.69B	4.82B	3.76B	2.66B
	Gross Profit
1.45B	1.45B	1.32B	1.54B	1.27B	926.96M
	EBIT
531.39M	544.58M	501.24M	572.97M	542.32M	379.32M
	EBITDA
675.00M	671.69M	669.29M	713.01M	616.79M	508.57M
	Net Income Common Stockholders
411.77M	454.53M	417.08M	419.42M	481.65M	327.16M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.17B	1.29B	2.10B	1.74B	1.45B	1.38B
	Total Assets
4.72B	4.75B	4.35B	4.01B	3.52B	2.72B
	Total Debt
158.14M	163.25M	171.94M	193.22M	239.16M	266.40M
	Net Debt
-1.02B	-1.12B	-1.86B	-1.49B	-1.21B	-1.06B
	Total Liabilities
1.08B	1.12B	880.89M	1.01B	1.03B	738.31M
	Stockholders Equity
3.64B	3.63B	3.47B	3.00B	2.49B	1.98B
Cash Flow		Free Cash Flow
418.68M	527.02M	534.22M	382.48M	460.83M	475.61M
	Operating Cash Flow
453.41M	559.17M	562.63M	464.10M	572.33M	544.41M
	Investing Cash Flow
-839.30M	-884.98M	-66.77M	-182.93M	-368.92M	-167.15M
	Financing Cash Flow
-427.84M	-390.41M	-165.77M	-2.02M	-59.56M	-765.00K

Epam Systems Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 170.75
• 50DMA: Positive
• 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 170.75 is below the 20-day moving average (MA) of 177.33, above the 50-day MA of 166.38, and below the 200-day MA of 204.72, indicating a neutral trend. The MACD of 0.89 indicates Positive momentum. The RSI at 44.62 is Neutral, neither overbought nor oversold. The STOCH value of 42.74 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
EXLS	77 Outperform	$7.74B	36.29	23.81%	―	14.18%	21.49%
EPAM	75 Outperform	$10.00B	24.58	11.57%	―	4.72%	-3.06%
CACI	75 Outperform	$9.80B	21.27	13.48%	―	14.16%	22.25%
G	75 Outperform	$7.62B	14.61	22.21%	1.56%	7.31%	-15.86%
WNS	75 Outperform	$2.82B	15.37	21.21%	―	-0.64%	30.96%
GLOB	66 Neutral	$4.33B	27.11	7.97%	―	11.90%	-11.15%
Sector *	62 Neutral	$11.97B	10.08	-7.46%	2.96%	7.37%	-8.22%

Epam Systems Corporate Events

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.