Looking at EPAM Systems, Inc.’s (NYSE:EPAM) earnings update on 30 June 2019, analyst consensus outlook appear cautiously subdued, with earnings expected to grow by 19% in the upcoming year compared with the higher past 5-year average growth rate of 26%. By 2020, we can expect EPAM Systems’s bottom line to reach US$287m, a jump from the current trailing-twelve-month of US$240m. Below is a brief commentary around EPAM Systems’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Exciting times ahead?
The view from 12 analysts over the next three years is one of positive sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of EPAM’s earnings growth over these next few years.
This results in an annual growth rate of 19% based on the most recent earnings level of US$240m to the final forecast of US$434m by 2022. EPS reaches $7.66 in the final year of forecast compared to the current $4.48 EPS today. Margins are currently sitting at 13%, approximately the same as previous years. With analysts forecasting revenue growth of 0.77975 and EPAM’s net income growth expected to roughly track that, this company may add value for shareholders over time.
Future outlook is only one aspect when you’re building an investment case for a stock. For EPAM Systems, there are three key factors you should look at:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is EPAM Systems worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether EPAM Systems is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of EPAM Systems? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.