Grid Dynamics Holdings (GDYN) AI Stock Analysis

• Market Cap: $809.89M
• Dividend Yield: N/A
• Average Volume (3M): 854.35K
• Price to Earnings (P/E): 60.0
• Beta (1Y): 1.16
• Revenue Growth: 23.63%
• EPS Growth: 427.13%
• Country: US
• Employees: 4,926
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 0.09
• Shares Outstanding: 84,805,200
• 10 Day Avg. Volume: 632,552
• 30 Day Avg. Volume: 854,346
• PEG Ratio: -1.32
• Price to Book (P/B): 3.33
• Price to Sales (P/S): 4.91
• P/FCF Ratio: 93.47
• Enterprise Value/Market Cap: 0.41
• Enterprise Value/Revenue: 0.81
• Enterprise Value/Gross Profit: 2.29
• Enterprise Value/Ebitda: 15.97
• 1Y Price Target: $12.25
• Price Target Upside: 26.16% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: $10.00 ▲(2.99% Upside)

The score is primarily supported by solid financial stability (very low leverage) and a constructive earnings outlook driven by AI-led growth and continued positive guidance. It is held back by weak profitability/free-cash-flow trends, a mixed technical picture with the stock below key longer-term averages, and a high P/E valuation with no dividend yield.

Positive Factors

AI-Driven Revenue Growth

The strong growth in AI-driven revenue highlights Grid Dynamics' ability to capitalize on emerging tech trends, ensuring sustained demand and competitive positioning in the digital transformation space.

Strong Balance Sheet

A strong balance sheet with minimal leverage provides financial stability and flexibility, enabling the company to invest in growth opportunities and withstand economic fluctuations.

Strategic Partnerships

Strategic partnerships with major cloud providers enhance service offerings and drive customer acquisition, supporting long-term growth and market presence.

Negative Factors

Declining Free Cash Flow

Declining free cash flow limits the company's ability to reinvest in growth initiatives and may strain financial resources, impacting long-term operational flexibility.

Profitability Challenges

Low profitability margins suggest operational inefficiencies, which could hinder the company's ability to generate sustainable earnings and compete effectively in the market.

Retail Revenue Decline

A decline in retail revenue, a key segment, indicates potential market challenges and could affect overall revenue growth if not addressed.

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 consulting services, project-based engagements, and long-term contracts that focus on digital transformation initiatives. The company typically charges clients on a time-and-materials basis or fixed-price contracts, depending on the nature of the project. Key revenue streams include software development, cloud migration services, data analytics, and machine learning implementations. Additionally, Grid Dynamics has formed strategic partnerships with major cloud providers like Google Cloud, Microsoft Azure, and Amazon Web Services, which not only enhance its service offerings but also drive customer acquisition and retention, contributing significantly to its earnings.

Grid Dynamics Holdings Financial Statement Overview

Summary

Grid Dynamics Holdings demonstrates solid revenue growth and a strong balance sheet, with a low debt-to-equity ratio indicating financial stability. However, profitability is a concern with a low net profit margin and negative EBIT margin. Cash flow challenges are evident with a declining free cash flow trend, necessitating improvements in profitability and cash flow generation.

Income Statement

Grid Dynamics Holdings shows a positive revenue growth rate of 4.3% TTM, indicating a steady upward trajectory. The gross profit margin is healthy at 35.3%, reflecting efficient cost management. However, the net profit margin is relatively low at 3.4%, and the EBIT margin is slightly negative, suggesting challenges in operational efficiency. Overall, the company is growing but needs to improve profitability.

Balance Sheet

The company maintains a strong balance sheet with a low debt-to-equity ratio of 0.025, indicating minimal leverage and financial stability. The return on equity is modest at 2.6%, suggesting room for improvement in generating returns for shareholders. The equity ratio is strong, showcasing a solid foundation of equity financing.

Cash Flow

Operating cash flow is robust, covering net income comfortably with a ratio of 0.65. However, the free cash flow growth rate is negative at -29.9%, indicating a decline in cash available for reinvestment. The free cash flow to net income ratio is healthy at 0.62, but the company needs to address the declining free cash flow trend.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	405.95M	350.57M	312.91M	310.48M	211.28M	111.28M
Gross Profit	143.26M	127.00M	113.15M	120.59M	87.73M	41.62M
EBITDA	20.54M	16.63M	6.54M	-11.36M	5.10M	-12.78M
Net Income	13.89M	4.04M	-1.76M	-29.21M	-7.70M	-12.60M
Balance Sheet
Total Assets	613.17M	592.19M	435.17M	411.15M	256.72M	167.13M
Cash, Cash Equivalents and Short-Term Investments	338.55M	334.65M	257.23M	256.73M	144.36M	112.75M
Total Debt	13.65M	12.63M	11.00M	8.14M	0.00	0.00
Total Liabilities	75.45M	74.36M	52.26M	48.10M	29.67M	15.41M
Stockholders Equity	537.72M	517.83M	382.91M	363.04M	227.05M	151.72M
Cash Flow
Free Cash Flow	23.59M	18.43M	33.22M	25.58M	13.26M	3.68M
Operating Cash Flow	37.77M	30.20M	41.09M	31.65M	17.97M	5.93M
Investing Cash Flow	-21.33M	-51.30M	-25.95M	-16.32M	-35.37M	-18.34M
Financing Cash Flow	91.45M	101.16M	-16.32M	97.76M	49.13M	82.97M

Grid Dynamics Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 9.71
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• 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 9.71 is above the 20-day moving average (MA) of 9.44, above the 50-day MA of 9.10, and below the 200-day MA of 10.24, indicating a neutral trend. The MACD of 0.13 indicates Positive momentum. The RSI at 48.01 is Neutral, neither overbought nor oversold. The STOCH value of 53.42 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
EPAM	73 Outperform	$11.71B	32.33	10.21%	―	14.26%	-15.49%
GDYN	68 Neutral	$809.89M	59.98	2.96%	―	23.63%	427.13%
GLOB	67 Neutral	$3.01B	29.85	4.91%	―	5.56%	-42.38%
ASGN	66 Neutral	$2.19B	17.13	7.25%	―	-4.86%	-25.15%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
AI	47 Neutral	$1.97B	-5.00	-46.77%	―	1.84%	-27.74%
BBAI	46 Neutral	$2.71B	-4.44	-111.83%	―	-6.95%	-53.69%

Grid Dynamics Holdings Corporate Events

Grid Dynamics expands equity plan and confirms board leadership

At its 2025 Annual Meeting of Stockholders held on December 23, 2025, Grid Dynamics shareholders approved an amendment to the company’s 2020 Equity Incentive Plan, adding 3.5 million shares of common stock for future equity awards and tightening governance by prohibiting repricing, exchanges, certain transfers or cash buyouts of awards without shareholder approval, a move that enhances the firm’s capacity to retain and incentivize talent while addressing investor concerns on equity award practices. Shareholders also elected three Class III directors to serve until the 2028 annual meeting, ratified Grant Thornton LLP as independent auditor for the fiscal year ending December 31, 2025, and gave advisory approval to executive compensation, with 91.0% of eligible voting power represented at the meeting, signaling broad investor engagement and support for the company’s current governance and compensation framework.

The most recent analyst rating on (GDYN) stock is a Buy with a $10.50 price target. To see the full list of analyst forecasts on Grid Dynamics Holdings stock, see the GDYN Stock Forecast page.

Grid Dynamics Updates Director Compensation Policy

On November 7, 2025, Grid Dynamics Holdings announced changes to its Outside Director Compensation Policy, effective December 23, 2025. The new policy stipulates that annual retainer fees for directors will be paid in equity, specifically in restricted stock units, instead of cash. Directors have the option to elect cash payments during a specified period. This move aligns director compensation with company performance, potentially impacting the company’s governance and aligning stakeholder interests.

The most recent analyst rating on (GDYN) stock is a Buy with a $14.00 price target. To see the full list of analyst forecasts on Grid Dynamics Holdings stock, see the GDYN Stock Forecast page.

Grid Dynamics Announces $50M Share Repurchase Program

On October 23, 2025, Grid Dynamics Holdings announced a $50 million share repurchase program, reflecting confidence in its long-term business prospects. The company reported record third-quarter revenues of $104.2 million, driven by strong demand in AI and digital transformation services, with significant contributions from the retail and technology, media, and telecom sectors. The company plans to enhance profitability by improving margins and increasing its billable engineer count, positioning itself for continued growth into 2026.

The most recent analyst rating on (GDYN) stock is a Buy with a $9.00 price target. To see the full list of analyst forecasts on Grid Dynamics Holdings stock, see the GDYN Stock Forecast page.