DB:E3M

Stock Analysis Report

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Executive Summary

EPAM Systems, Inc. provides digital platform engineering and software development services in North America, Europe, Armenia, Belarus, Kazakhstan, Russia, Ukraine, Asia, and Australia.


Snowflake Analysis

Excellent balance sheet with moderate growth potential.


Similar Companies

Share Price & News

How has EPAM Systems's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: E3M's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

5.6%

E3M

6.8%

DE IT

4.3%

DE Market


1 Year Return

37.7%

E3M

-12.1%

DE IT

0.3%

DE Market

Return vs Industry: E3M exceeded the German IT industry which returned -13.5% over the past year.

Return vs Market: E3M exceeded the German Market which returned -0.1% over the past year.


Shareholder returns

E3MIndustryMarket
7 Day5.6%6.8%4.3%
30 Day8.3%6.5%7.4%
90 Day6.2%-0.1%-0.2%
1 Year37.7%37.7%-11.7%-12.1%2.0%0.3%
3 Year176.4%176.4%70.5%66.1%-5.0%-12.3%
5 Year233.4%233.4%208.4%194.7%4.2%-9.2%

Price Volatility Vs. Market

How volatile is EPAM Systems's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is EPAM Systems undervalued compared to its fair value and its price relative to the market?

43.86x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: E3M (€210.4) is trading above our estimate of fair value (€119.51)

Significantly Below Fair Value: E3M is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: E3M is poor value based on its PE Ratio (43.9x) compared to the IT industry average (24.1x).

PE vs Market: E3M is poor value based on its PE Ratio (43.9x) compared to the German market (19x).


Price to Earnings Growth Ratio

PEG Ratio: E3M is poor value based on its PEG Ratio (2.1x)


Price to Book Ratio

PB vs Industry: E3M is overvalued based on its PB Ratio (7.7x) compared to the DE IT industry average (3.8x).


Next Steps

Future Growth

How is EPAM Systems forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

21.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: E3M's forecast earnings growth (21.1% per year) is above the savings rate (0.2%).

Earnings vs Market: E3M's earnings (21.1% per year) are forecast to grow slower than the German market (22.5% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: E3M's revenue (17.6% per year) is forecast to grow faster than the German market (5.7% per year).

High Growth Revenue: E3M's revenue (17.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: E3M's Return on Equity is forecast to be low in 3 years time (18.9%).


Next Steps

Past Performance

How has EPAM Systems performed over the past 5 years?

29.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: E3M has high quality earnings.

Growing Profit Margin: E3M's current net profit margins (11.8%) are lower than last year (12.2%).


Past Earnings Growth Analysis

Earnings Trend: E3M's earnings have grown significantly by 29.8% per year over the past 5 years.

Accelerating Growth: E3M's earnings growth over the past year (20.8%) is below its 5-year average (29.8% per year).

Earnings vs Industry: E3M earnings growth over the past year (20.8%) exceeded the IT industry 4.8%.


Return on Equity

High ROE: E3M's Return on Equity (17.4%) is considered low.


Next Steps

Financial Health

How is EPAM Systems's financial position?


Financial Position Analysis

Short Term Liabilities: E3M's short term assets ($1.5B) exceed its short term liabilities ($389.3M).

Long Term Liabilities: E3M's short term assets ($1.5B) exceed its long term liabilities ($275.1M).


Debt to Equity History and Analysis

Debt Level: E3M's debt to equity ratio (1.5%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if E3M's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: E3M's debt is well covered by operating cash flow (1401.1%).

Interest Coverage: E3M earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

What is EPAM Systems's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate E3M's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate E3M's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if E3M's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if E3M's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of E3M's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.6yrs

Average management tenure


CEO

Arkadiy Dobkin (59yo)

17.42yrs

Tenure

US$4,325,620

Compensation

Mr. Arkadiy Dobkin co-founded EPAM Systems, Inc., a subsidiary of B2BITS Corp. in 1993 and has been Chairman, Chief Executive Officer and President since December 2002. Mr. Dobkin began his career in Russi ...


CEO Compensation Analysis

Compensation vs Market: Arkadiy's total compensation ($USD4.33M) is about average for companies of similar size in the German market ($USD5.24M).

Compensation vs Earnings: Arkadiy's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Arkadiy Dobkin
Co-Founder17.42yrsUS$4.33m3.34% $386.1m
Jason Peterson
Senior VP3yrsUS$1.81m0.0055% $639.0k
Lawrence Solomon
Senior VP & Chief People Officer3.58yrsUS$1.51m0.0029% $335.1k
Balazs Fejes
Executive VP & Co-Head of Global Business7.75yrsUS$1.96m0.0056% $645.9k
Viktar Dvorkin
Senior VP & Head of Global Deliveryno dataUS$1.52m0.025% $2.8m
Yuriy Goliyad
Head of Global Operations & Senior VP4.42yrsno datano data
Gary Abrahams
VP, Corporate Controller & Chief Accounting Officer3.08yrsno data0.0011% $127.1k
David Straube
Head of Investor Relationsno datano datano data
Philip Storm
Senior VP & Chief Compliance Officer2.67yrsno datano data
Edward Rockwell
Senior VPno datano data0.00029% $33.5k

3.6yrs

Average Tenure

51yo

Average Age

Experienced Management: E3M's management team is considered experienced (3.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Arkadiy Dobkin
Co-Founder17.42yrsUS$4.33m3.34% $386.1m
Richard Mayoras
Independent Non-Employee Director7.33yrsUS$210.03k0.012% $1.4m
Karl Robb
Non-Employee Director16.17yrsUS$280.53k0.0060% $694.5k
Eugene Roman
Independent Non-Employee Director0.25yrno datano data
Ronald Vargo
Lead Independent Non-Employee Director5.08yrsUS$237.53k0.015% $1.7m
Robert Segert
Independent Non-Employee Director8.33yrsUS$196.53k0.029% $3.3m
Helen Shan
Independent Non-Employee Director1.67yrsUS$198.41kno data
Jill Smart
Independent Non-Employee Director3.83yrsUS$201.53k0.0052% $598.6k

6.2yrs

Average Tenure

58yo

Average Age

Experienced Board: E3M's board of directors are considered experienced (6.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: E3M insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

EPAM Systems, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: EPAM Systems, Inc.
  • Ticker: E3M
  • Exchange: DB
  • Founded: 1993
  • Industry: IT Consulting and Other Services
  • Sector: Software
  • Market Cap: US$12.690b
  • Listing Market Cap: US$11.555b
  • Shares outstanding: 55.64m
  • Website: https://www.epam.com

Number of Employees


Location

  • EPAM Systems, Inc.
  • 41 University Drive
  • Suite 202
  • Newtown
  • Pennsylvania
  • 18940
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
EPAMNYSE (New York Stock Exchange)YesCommon SharesUSUSDFeb 2012
E3MDB (Deutsche Boerse AG)YesCommon SharesDEEURFeb 2012
EPAM *BMV (Bolsa Mexicana de Valores)YesCommon SharesMXMXNFeb 2012

Biography

EPAM Systems, Inc. provides digital platform engineering and software development services in North America, Europe, Armenia, Belarus, Kazakhstan, Russia, Ukraine, Asia, and Australia. The company offers engineering services, including requirements analysis and platform selection, customization, cross-platform migration, implementation, and integration; infrastructure management services, such as software development, testing, and maintenance with private, public, and mobile infrastructures for application, database, network, server, storage, and systems operations management, as well as monitoring, incident notification, and resolution services; and maintenance and support services. It also provides operation solutions comprising integrated engineering practices and smart automation; and optimization solutions that include software application testing, test management, automation, and consulting services to enable customers enhance their existing software testing and quality assurance practices, as well as other testing services that identify threats and close loopholes to protect its customers’ business systems from information loss. In addition, the company offers industry, technology, experience, and technical advisory consulting services; and digital and service design solutions, which comprise strategy, design, creative, and program management services, as well as physical product development. It serves the financial services, travel and consumer, software and hi-tech, business information and media, life sciences and healthcare, and other industries. EPAM Systems, Inc. has a partnership with Curogram to help healthcare systems implement a simplified COVID-19 crisis response solution. The company was founded in 1993 and is headquartered in Newtown, Pennsylvania. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/05/28 23:20
End of Day Share Price2020/05/28 00:00
Earnings2020/03/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.