NYSE:EPAM

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

Excellent balance sheet with solid track record.


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: EPAM has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

5.5%

EPAM

1.7%

US IT

0.4%

US Market


1 Year Return

59.2%

EPAM

25.7%

US IT

13.1%

US Market

Return vs Industry: EPAM exceeded the US IT industry which returned 25.7% over the past year.

Return vs Market: EPAM exceeded the US Market which returned 13.1% over the past year.


Shareholder returns

EPAMIndustryMarket
7 Day5.5%1.7%0.4%
30 Day5.7%0.5%4.0%
90 Day6.8%0.7%7.4%
1 Year59.2%59.2%26.9%25.7%15.6%13.1%
3 Year213.5%213.5%96.0%87.7%48.2%38.6%
5 Year314.1%314.1%133.0%112.2%62.6%44.6%

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

Valuation

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

44.37x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: EPAM ($200.84) is trading above our estimate of fair value ($185.01)

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


Price To Earnings Ratio

PE vs Industry: EPAM is poor value based on its PE Ratio (44.4x) compared to the IT industry average (30.9x).

PE vs Market: EPAM is poor value based on its PE Ratio (44.4x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: EPAM is poor value based on its PEG Ratio (2.2x)


Price to Book Ratio

PB vs Industry: EPAM is overvalued based on its PB Ratio (7.4x) compared to the US IT industry average (4x).


Next Steps

Future Growth

How is EPAM Systems forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

20.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: EPAM's forecast earnings growth (20% per year) is above the savings rate (2.7%).

Earnings vs Market: EPAM's earnings (20% per year) are forecast to grow faster than the US market (14.3% per year).

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

Revenue vs Market: EPAM's revenue (17.6% per year) is forecast to grow faster than the US market (7.3% per year).

High Growth Revenue: EPAM'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: EPAM's Return on Equity is forecast to be low in 3 years time (16.6%).


Next Steps

Past Performance

How has EPAM Systems performed over the past 5 years?

27.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: EPAM has high quality earnings.

Growing Profit Margin: EPAM's current net profit margins (11.4%) are higher than last year (8.6%).


Past Earnings Growth Analysis

Earnings Trend: EPAM's earnings have grown significantly by 27.7% per year over the past 5 years.

Accelerating Growth: EPAM's earnings growth over the past year (65%) exceeds its 5-year average (27.7% per year).

Earnings vs Industry: EPAM earnings growth over the past year (65%) exceeded the IT industry 17%.


Return on Equity

High ROE: EPAM's Return on Equity (16.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is EPAM Systems's financial position?


Financial Position Analysis

Short Term Liabilities: EPAM's short term assets ($1.4B) exceeds its short term liabilities ($311.5M)

Long Term Liabilities: EPAM's short term assets (1.4B) exceeds its long term liabilities (236.6M)


Debt to Equity History and Analysis

Debt Level: EPAM's debt to equity ratio (1.7%) is considered satisfactory

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

Debt Coverage: EPAM's debt is well covered by operating cash flow (1144%).

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


Balance Sheet

Inventory Level: EPAM has a low level of unsold assets or inventory.

Debt Coverage by Assets: EPAM's debt is covered by short term assets (assets are 54.6x debt).


Next Steps

Dividend

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


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.3%forecastin3Years0%

Current dividend yield vs market & industry

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

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


Stability and Growth of Payments

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

Growing Dividend: Insufficient data to determine if EPAM'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 EPAM's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of EPAM Systems's salary, the management and board of directors tenure and is there insider trading?

3.1yrs

Average management tenure


CEO

Arkadiy Dobkin (59yo)

16.9yrs

Tenure

US$3,786,788

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 ($USD3.79M) is below average for companies of similar size in the US market ($USD10.97M).

Compensation vs Earnings: Arkadiy's compensation has increased by more than 20% in the past year.


Management Age and Tenure

3.1yrs

Average Tenure

51yo

Average Age

Experienced Management: EPAM's management team is considered experienced (3.1 years average tenure).


Board Age and Tenure

6.8yrs

Average Tenure

57yo

Average Age

Experienced Board: EPAM's board of directors are considered experienced (6.8 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellUS$719,52612 Nov 19
Lawrence Solomon
EntityIndividual
Role
Head of Human Resources
Senior VP & Chief People Officer
Shares3,640
Max PriceUS$197.67
SellUS$589,42118 Jun 19
Richard Mayoras
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Employee Director
Shares3,372
Max PriceUS$175.20
SellUS$63,95510 Jun 19
Gary Abrahams
EntityIndividual
Role
Chief Accounting Officer
VP, Corporate Controller & Chief Accounting Officer
Shares361
Max PriceUS$177.16
SellUS$330,08431 May 19
Jason Harman
EntityIndividual
Shares1,908
Max PriceUS$173.00
SellUS$1,335,76524 May 19
Elaina Shekhter
EntityIndividual
Shares7,801
Max PriceUS$171.23
SellUS$4,217,79916 May 19
Arkadiy Dobkin
EntityIndividual
Role
Chief Executive Officer
Co-Founder
Shares25,000
Max PriceUS$170.18
SellUS$319,28011 Mar 19
Ronald Vargo
EntityIndividual
Role
Lead Director
Lead Independent Non-Employee Director
Shares2,000
Max PriceUS$159.64
SellUS$126,96026 Feb 19
Jason Peterson
EntityIndividual
Role
Chief Financial Officer
Senior VP
Shares800
Max PriceUS$158.70

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.1%.


Management Team

  • Balazs Fejes (44yo)

    Executive VP & Co-Head of Global Business

    • Tenure: 7.3yrs
    • Compensation: US$1.78m
  • Arkadiy Dobkin (59yo)

    Co-Founder

    • Tenure: 16.9yrs
    • Compensation: US$3.79m
  • Jason Peterson (56yo)

    Senior VP

    • Tenure: 2.5yrs
    • Compensation: US$1.42m
  • Yuriy Goliyad

    Head of Global Operations & Senior VP

    • Tenure: 3.9yrs
  • Viktar Dvorkin (46yo)

    Senior VP & Head of Global Delivery

    • Tenure: 0yrs
    • Compensation: US$1.37m
  • Ed Rockwell (51yo)

    Senior VP

    • Tenure: 0yrs
  • Larry Solomon (54yo)

    Senior VP & Chief People Officer

    • Tenure: 3.1yrs
    • Compensation: US$1.36m
  • Gary Abrahams (51yo)

    VP, Corporate Controller & Chief Accounting Officer

    • Tenure: 2.6yrs
  • Philip Storm

    Senior VP & Chief Compliance Officer

    • Tenure: 2.2yrs
  • David Straube

    Head of Investor Relations

    • Tenure: 0yrs

Board Members

  • Mike Mayoras (57yo)

    Independent Non-Employee Director

    • Tenure: 6.8yrs
    • Compensation: US$188.83k
  • Karl Robb (57yo)

    Non-Employee Director

    • Tenure: 15.7yrs
    • Compensation: US$259.33k
  • Arkadiy Dobkin (59yo)

    Co-Founder

    • Tenure: 16.9yrs
    • Compensation: US$3.79m
  • Ron Vargo (64yo)

    Lead Independent Non-Employee Director

    • Tenure: 4.6yrs
    • Compensation: US$216.33k
  • Bob Segert (51yo)

    Independent Non-Employee Director

    • Tenure: 7.8yrs
    • Compensation: US$188.46k
  • Helen Shan (52yo)

    Non-Employee Director

    • Tenure: 1.2yrs
    • Compensation: US$117.85k
  • Jill Smart (59yo)

    Independent Non-Employee Director

    • Tenure: 3.3yrs
    • Compensation: US$180.33k

Company Information

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


Key Information

  • Name: EPAM Systems, Inc.
  • Ticker: EPAM
  • Exchange: NYSE
  • Founded: 1993
  • Industry: IT Consulting and Other Services
  • Sector: Software
  • Market Cap: US$11.043b
  • Shares outstanding: 54.98m
  • 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

Biography

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


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/14 00:29
End of Day Share Price2019/11/13 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


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.