Grid Dynamics Holdings (GDYN) AI Stock Analysis

• Market Cap: $651.96M
• Dividend Yield: N/A
• Average Volume (3M): 1.19M
• Price to Earnings (P/E): 38.0
• Beta (1Y): 1.39
• Revenue Growth: 22.27%
• EPS Growth: N/A
• Country: US
• Employees: 4,926
• Sector: Technology
• Sector Strength: 89
• Industry: Information Technology Services
• EPS (TTM): 0.10
• Shares Outstanding: 84,669,950
• 10 Day Avg. Volume: 1,504,315
• 30 Day Avg. Volume: 1,189,904
• PEG Ratio: -1.36
• Price to Book (P/B): 3.33
• Price to Sales (P/S): 4.91
• P/FCF Ratio: 93.47
• Enterprise Value/Market Cap: 1.04
• Enterprise Value/Revenue: 1.74
• Enterprise Value/Gross Profit: 4.79
• Enterprise Value/Ebitda: 23.92
• 1Y Price Target: $13.10
• Price Target Upside: 70.13% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 66 Neutral
• Price Target: $8.50 ▲(10.39% Upside)

Grid Dynamics Holdings exhibits strong financial performance with impressive revenue growth and cash flow generation. However, technical indicators suggest a bearish trend, and valuation metrics indicate potential overvaluation. The positive developments from the credit agreement amendment and strategic focus on AI and data provide some optimism, though challenges in certain business segments and macroeconomic uncertainties remain significant.

Positive Factors

Client Portfolio

A healthy client portfolio composed of strategic relations drives an optimistic view for the company's future performance.

Revenue Growth

Grid Dynamics' AI and data practice accounted for 23% of total organic revenue and is growing 3 times faster than the overall business.

Strategic Acquisitions

The company is in late-stage negotiations with acquisition targets having strong cloud and AI skills, anticipating more synergies from these moves.

Negative Factors

Economic Conditions

Worsening economic conditions could taper the company’s near-term growth prospects.

Gross Margin Decline

Gross margin declined 150 basis points year-over-year to 34.1%, falling short of consensus due to unfavorable FX, incremental investments, and timing of certain fixed price contracts.

Growth Challenges

The target price is lowered to reflect near-term growth challenges and moderated projections across growth and margin.

Grid Dynamics Holdings Business Overview & Revenue Model

Company Description

Grid 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 Money

Grid Dynamics generates revenue through a combination of service-based models, including project-based consulting fees, retainer contracts, and subscription services. Key revenue streams include custom software development, cloud migration services, data analytics solutions, and ongoing IT support. The company often engages in strategic partnerships with major technology firms, which help expand its service offerings and market reach. Additionally, its focus on high-demand sectors allows it to command premium pricing for specialized services, contributing significantly to its overall earnings.

Grid Dynamics Holdings Financial Statement Overview

Summary

Grid Dynamics Holdings presents a strong financial position with impressive revenue growth, efficient cost management, and robust cash flow generation. The low leverage and high equity ratio enhance financial stability. However, operational fluctuations and increased capital expenditures may pose challenges going forward.

Income Statement

Grid Dynamics Holdings has shown strong revenue growth, with a 24.1% increase from 2024 to TTM (Trailing-Twelve-Months). The gross profit margin stands at 36.3% for TTM, indicating efficient cost management. Net profit margin improved significantly to 4.4% from a negative in prior years. The EBIT and EBITDA margins have also improved, reflecting enhanced operational efficiency. However, the volatility in EBIT over the years suggests some operational challenges.

Balance Sheet

The company demonstrates a solid balance sheet with a debt-to-equity ratio of 0.03, showcasing minimal leverage and financial risk. Return on equity for the TTM is 3.2%, indicating decent profitability for its shareholders. The equity ratio of 87.4% suggests a strong reliance on equity financing, underscoring financial stability.

Cash Flow

Grid Dynamics has improved its free cash flow by 82.5% from 2024 to TTM, highlighting strong cash generation capabilities. The operating cash flow to net income ratio is 2.97, indicating robust cash conversion. The free cash flow to net income ratio stands at 1.98, further supporting its healthy cash flow position. Despite these strengths, capital expenditures have risen, which could pressure future cash flows.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	389.23M	350.57M	312.91M	310.48M	211.28M	111.28M
Gross Profit	141.28M	127.00M	113.15M	120.59M	87.73M	41.62M
EBITDA	28.30M	16.63M	7.69M	-10.81M	5.10M	-12.54M
Net Income	16.99M	4.04M	-1.76M	-29.21M	-7.70M	-12.60M
Balance Sheet
Total Assets	608.91M	592.19M	435.17M	411.15M	256.72M	167.13M
Cash, Cash Equivalents and Short-Term Investments	336.88M	334.65M	257.23M	256.73M	144.36M	112.75M
Total Debt	15.28M	12.63M	11.00M	8.14M	0.00	0.00
Total Liabilities	76.69M	74.36M	52.26M	48.10M	29.67M	15.41M
Stockholders Equity	532.21M	517.83M	382.91M	363.04M	227.05M	151.73M
Cash Flow
Free Cash Flow	33.64M	18.43M	33.22M	25.58M	13.26M	3.68M
Operating Cash Flow	50.41M	30.20M	41.09M	31.65M	17.97M	5.93M
Investing Cash Flow	-55.11M	-51.30M	-25.95M	-16.32M	-35.37M	-18.34M
Financing Cash Flow	76.38M	101.16M	-16.32M	97.76M	49.13M	82.97M

Grid Dynamics Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7.70
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: 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 7.7 is below the 20-day moving average (MA) of 8.96, below the 50-day MA of 10.56, and below the 200-day MA of 15.89, indicating a bearish trend. The MACD of -0.90 indicates Positive momentum. The RSI at 25.85 is Positive, neither overbought nor oversold. The STOCH value of 38.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GDYN.

Grid Dynamics Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FORTY	76 Outperform	$1.88B	22.85	12.47%	1.60%	6.22%	24.91%
FLYW	71 Outperform	$1.49B	300.97	0.86%	―	22.20%	―
TASK	70 Outperform	$1.55B	25.63	12.49%	―	19.04%	24.49%
GDYN	66 Neutral	$651.96M	38.02	3.69%	―	22.27%	―
Sector *	61 Neutral	$36.30B	7.30	-7.27%	1.97%	7.76%	-6.42%
NABL	61 Neutral	$1.43B	501.31	0.37%	―	7.40%	-90.72%
VYX	45 Neutral	$1.75B	―	-8.85%	―	-43.28%	15.29%

Grid Dynamics Holdings Corporate Events

Grid Dynamics Holdings Amends Credit Agreement for Flexibility

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.