EPAM Systems, Inc. (NYSE:EPAM) Just Released Its Third-Quarter Earnings: Here's What Analysts Think

Investors in EPAM Systems, Inc. (NYSE:EPAM) had a good week, as its shares rose 7.2% to close at US$175 following the release of its quarterly results. Revenues of US$1.4b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$1.91, missing estimates by 2.7%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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After the latest results, the 18 analysts covering EPAM Systems are now predicting revenues of US$5.82b in 2026. If met, this would reflect a solid 9.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 30% to US$8.69. Before this earnings report, the analysts had been forecasting revenues of US$5.79b and earnings per share (EPS) of US$8.46 in 2026. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

See our latest analysis for EPAM Systems

The consensus price target was unchanged at US$207, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic EPAM Systems analyst has a price target of US$255 per share, while the most pessimistic values it at US$160. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that EPAM Systems' revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 7.8% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than EPAM Systems.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around EPAM Systems' earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on EPAM Systems. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for EPAM Systems going out to 2027, and you can see them free on our platform here..

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.