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Grid Dynamics Holdings (GDYN)
NASDAQ:GDYN
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Grid Dynamics Holdings
(NASDAQ:GDYN)
Rating:66Neutral
Price Target:
$11.00
▲(5.16%Upside)
Positive Factors
Earnings
Grid Dynamics reported fourth-quarter results ahead of consensus expectations on the top and bottom lines.
Growth Potential
Based on GDYN's AI investments and strong vertical and domain capabilities, the business is positioned to gain share and re-accelerate organic growth throughout FY25 and into FY26.
Mergers and Acquisitions
Integration of the recent acquisitions of Mobile Computing and JUXT are tracking in line with plan and management anticipates more synergies.
Negative Factors
Guidance Concerns
Mixed 2Q guides and a surprising CY25 revenue outlook affirmation amid elevated macro uncertainty may cause some consternation as investors fret about potential guidance cuts later.
Macro Environment
Worsening economic conditions would taper the company’s near-term growth prospects.
Grid Dynamics Holdings (GDYN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$884.37M
Dividend YieldN/A
Average Volume (3M)748.31K
Price to Earnings (P/E)80.0
Beta (1Y)1.22
Revenue Growth18.72%
EPS Growth347.70%
CountryUS
Employees4,926
SectorTechnology
Sector Strength91
IndustryInformation Technology Services
Share Statistics
EPS (TTM)0.11
Shares Outstanding84,547,650
10 Day Avg. Volume810,164
30 Day Avg. Volume748,308
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)1.70
Price to Sales (P/S)0.00
P/FCF Ratio36.16
Enterprise Value/Market Cap0.63
Enterprise Value/Revenue0.41
Enterprise Value/Gross Profit4.09
Enterprise Value/Ebitda7.80
Forecast
1Y Price Target
$18.33Price Target Upside75.24% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Grid Dynamics Holdings Business Overview & Revenue Model
Company DescriptionGrid Dynamics Holdings, Inc., together with its subsidiaries, provides enterprise-level digital transformation services in the areas of search, analytics, and release automation for Fortune 1000 corporations in North America, Europe, and internationally. It works in collaboration with its clients on digital transformation initiatives that cover strategy consulting, early prototypes, and enterprise-scale delivery of new digital platforms. The company offers technical consulting, software design, development, testing, and internet service operations services. It serves customers that operate in the retail, technology and telecommunications, media, consumer packaged goods/manufacturing, financial services, and other sectors. The company was formerly known as ChaSerg Technology Acquisition Corp. and changed its name to Grid Dynamics Holdings, Inc. Grid Dynamics Holdings, Inc. was founded in 2006 and is headquartered in San Ramon, California.
How the Company Makes MoneyGrid Dynamics generates revenue primarily through its digital transformation services, which include consulting, engineering, and delivery services tailored to client-specific needs. The company earns money by engaging in long-term contracts with large enterprises seeking to overhaul their digital infrastructure. Revenue is driven by the demand for innovative technology solutions in areas such as cloud computing, data analytics, and artificial intelligence. Strategic partnerships with leading technology vendors and platforms, as well as a strong focus on customer relationships, contribute significantly to the company's earnings by enhancing its service offerings and expanding its market reach.
Grid Dynamics Holdings Earnings Call Summary
Earnings Call Date:May 01, 2025
(Q1-2025)
| % Change Since: -25.71%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive outlook with strong revenue growth, successful acquisitions, and significant traction in AI initiatives. However, there are challenges in traditional verticals and certain customer segments. The overall sentiment is cautiously optimistic given the successful strategic expansions and strong financial performance.Q1-2025 Updates
Positive Updates
Record Revenue Performance
Grid Dynamics exceeded Wall Street expectations with over $100 million in revenue for the second consecutive quarter, marking a 25.8% year-over-year growth.
Successful Acquisitions
Acquisitions like Argentina-based Mobile Computing and UK-based JUXT are performing well, enhancing capabilities in AI and financial services.
Growth in Financial Sector
Finance became the second-largest vertical with a 144.3% year-over-year growth, driven by acquisitions and strong performance in Fintech and Insurance.
AI Initiatives Gaining Traction
AI initiatives are moving from proof-of-concept to enterprise-scale implementations, focusing on AI-based search solutions, Agentic AI platform, and productivity tools.
Strong Global Talent Expansion
Grid Dynamics expanded its headcount to 4,926, reflecting strategic growth in key regions like India and Latin America.
Negative Updates
Flat Revenue in Traditional Verticals
Retail, the largest vertical, had a slight sequential decline of 3.7%. TMT also remained flat compared to the previous quarter.
Decline in Certain Customer Segments
Revenues from 'Other' verticals declined 15.1% year-over-year, particularly due to a decrease in customers tied to the hospitality industry.
Slight Decline in GAAP Net Income
GAAP net income decreased sequentially from $4.5 million to $2.9 million, mainly due to higher operating costs, including stock-based compensation.
Company Guidance
In the first quarter of 2025, Grid Dynamics exceeded expectations with over $100 million in quarterly revenue, marking the second consecutive quarter to achieve this milestone. The company's performance was driven by customer-specific trends, achieving the highest ever billable engineering headcount, a key growth indicator. Financially, Grid Dynamics reported a 25.8% year-over-year revenue increase, with non-GAAP EBITDA at $14.6 million, surpassing the anticipated range. The company maintained its full-year revenue outlook of $415 million to $435 million, reflecting an 18.4% to 24.1% growth from the previous year. Partnerships contributed 16% of total revenue, with notable traction seen with hyperscalers like Google. The company's headcount reached 4,926 by the end of the quarter, with the non-U.S. workforce comprising 92.8% of the total. Grid Dynamics also saw significant growth in the Finance vertical, with a 144.3% year-over-year increase, driven by acquisitions and strong performance from Fintech and Insurance customers.Grid Dynamics Holdings Financial Statement Overview
Summary
Grid Dynamics Holdings demonstrates solid financial health with strong revenue growth and stable balance sheet metrics. While profitability and return metrics show room for improvement, the company's cash flow position is strong, providing a solid foundation for future growth.Income Statement
Grid Dynamics Holdings shows strong revenue growth with a 18.1% increase in TTM revenue compared to the previous annual figure. The gross profit margin stands at 36.7% for TTM, indicating efficient cost management. However, the net profit margin is relatively low at 2.9%, suggesting room for improvement in overall profitability. The company has improved its EBIT and EBITDA margins over time, but these could be further enhanced.75
Positive
Balance Sheet
The balance sheet is robust with a low debt-to-equity ratio of 0.02, indicating minimal reliance on debt financing. The equity ratio is high at 87.6%, showcasing strong financial stability. Return on Equity (ROE) is modest at 2.1%, suggesting potential for better returns on shareholder investments.85
Very Positive
Cash Flow
Cash flow analysis reveals a healthy free cash flow growth rate of 32.4% in TTM. The operating cash flow to net income ratio is favorable at 3.33, indicating strong cash generation relative to net income. Free cash flow to net income ratio is also positive, reflecting efficient cash management.80
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 350.57M | 312.91M | 310.48M | 211.28M | 111.28M |
| Gross Profit | 127.00M | 113.15M | 120.59M | 87.73M | 41.62M |
| EBITDA | 16.63M | 7.69M | -10.81M | 5.10M | -12.54M |
| Net Income | 4.04M | -1.76M | -29.21M | -7.70M | -12.60M |
Balance Sheet | |||||
| Total Assets | 592.19M | 435.17M | 411.15M | 256.72M | 167.13M |
| Cash, Cash Equivalents and Short-Term Investments | 334.65M | 257.23M | 256.73M | 144.36M | 112.75M |
| Total Debt | 12.63M | 11.00M | 8.14M | 0.00 | 0.00 |
| Total Liabilities | 74.36M | 52.26M | 48.10M | 29.67M | 15.41M |
| Stockholders Equity | 517.83M | 382.91M | 363.04M | 227.05M | 151.73M |
Cash Flow | |||||
| Free Cash Flow | 18.43M | 33.22M | 25.58M | 13.26M | 3.68M |
| Operating Cash Flow | 30.20M | 41.09M | 31.65M | 17.97M | 5.93M |
| Investing Cash Flow | -51.30M | -25.95M | -16.32M | -35.37M | -18.34M |
| Financing Cash Flow | 101.16M | -16.32M | 97.76M | 49.13M | 82.97M |
Grid Dynamics Holdings Technical Analysis
Negative
10.46
Price Trends
11.97
Negative
13.56
Negative
16.40
Negative
Market Momentum
-0.45
Positive
36.96
Neutral
25.45
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GDYN, the sentiment is Negative. The current price of 10.46 is below the 20-day moving average (MA) of 11.20, below the 50-day MA of 11.97, and below the 200-day MA of 16.40, indicating a bearish trend. The MACD of -0.45 indicates Positive momentum. The RSI at 36.96 is Neutral, neither overbought nor oversold. The STOCH value of 25.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GDYN.
Grid Dynamics Holdings Risk Analysis
Grid Dynamics Holdings disclosed 57 risk factors in its most recent earnings report. Grid Dynamics Holdings reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Grid Dynamics Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $1.53B | 28.64 | 11.35% | ― | 14.05% | 17.90% | |
74 Outperform | $1.92B | 23.62 | 12.47% | 1.54% | 6.22% | 24.91% | |
73 Outperform | $1.55B | 94.26 | 2.20% | ― | 7.98% | -40.59% | |
70 Outperform | $1.42B | 414.54 | 0.63% | ― | 20.97% | ― | |
68 Neutral | ¥232.71B | 14.90 | 7.50% | 2.60% | 9.27% | 5.76% | |
66 Neutral | $884.37M | 79.97 | 2.42% | ― | 18.72% | 347.70% | |
57 Neutral | $1.98B | ― | -19.49% | ― | -50.48% | -15.75% |
* Technology Sector Average
Performance Comparison
GDYN
Grid Dynamics Holdings
10.46
-2.27
-17.83%
FORTY
Formula Systems
127.00
45.35
55.54%
VYX
NCR Voyix
14.38
-0.52
-3.49%
FLYW
Flywire
11.69
-7.24
-38.25%
TASK
TaskUs
17.06
0.31
1.85%
NABL
N-able
8.21
-5.63
-40.68%
Grid Dynamics Holdings Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Grid Dynamics Holdings Amends Credit Agreement for Flexibility
Positive
May 21, 2025
Grid Dynamics Holdings, Inc. announced on May 20, 2025, that it has entered into a Fourth Amendment to its Credit Agreement originally dated March 15, 2022. This amendment extends the maturity date to March 15, 2028, and increases certain financial covenants, allowing for a secured multicurrency revolving loan facility of up to $30 million, which can be expanded to $50 million under specific conditions. The amendment is expected to provide the company with greater financial flexibility for working capital and general corporate purposes, potentially impacting its operational capabilities and market positioning.
The most recent analyst rating on (GDYN) stock is a Buy with a $17.00 price target. To see the full list of analyst forecasts on Grid Dynamics Holdings stock, see the GDYN Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.