EPAM Systems, Inc. (EPAM) stock analysis

P/E below its 5-year median

EPAM Systems's P/E of 20.4 is below its own 5-year median of 30.7.

P/E below the industry

EPAM Systems's P/E of 20.4 is below the Computer Programming, Data Processing, and Other Computer Related Services median of 27.6.

EV/EBITDA below its 5-year median

EPAM Systems's EV/EBITDA of 10.3 is below its 5-year median of 17.5.

P/B below the industry

EPAM Systems's price-to-book of 2.34 is below the Computer Programming, Data Processing, and Other Computer Related Services median of 3.32.

Trading below fair value

The share price of $162.82 is below our fair value estimate of $227.27.

Margin of safety over 20%

The price is 28.4% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 4.2% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -1.8% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 14.4% over the last twelve months, against a 5-year average of 2.9% a year.

Growing slower than the industry

Revenue grew 6.6% over the last twelve months; the Computer Programming, Data Processing, and Other Computer Related Services median is 9.6%.

Guidance lowered

EPAM Systems lowered its full year year-over-year revenue growth rate on an organic constant currency basis outlook on Aug 6, 2026.

Gross margin improving

Gross margin was 29.9% over the last twelve months, against 28.9% a year earlier.

Return on equity under 15%

Return on equity was 11.6% over the last twelve months and averaged 14.6% over five years; we look for 15% on both.

Return on capital over 10%

Return on invested capital was 16.8%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

EPAM Systems's return on equity of 11.6% is above the Computer Programming, Data Processing, and Other Computer Related Services median of -1.2%.

Earnings grew over 5 years

Net income grew 2.9% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 7.5% over the last twelve months, against a 5-year average of 9.4%.

Net margin above the industry

EPAM Systems's net margin of 7.5% is above the Computer Programming, Data Processing, and Other Computer Related Services median of -4.8%.

Low debt

Debt is 0.7% of shareholders' equity, under the 40% we consider low.

Debt falling against equity

Debt to equity fell from 1.3% five years ago to 0.7%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 2132% of total debt.

Interest coverage

Interest expense is not reported separately.

Short-term assets cover short-term debts

Current assets are 2.76 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 6.64; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

EPAM Systems has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.