One-glance verdict
Undervalued
$200.90 our estimate vs market $109.67
Wall Street consensus: $122.82 (-38.9% lower than our fair-value estimate)
45% below our estimate, below the bear case
Fundamentals snapshot
EPAM Systems, Inc.
EPAM · NYQ · Technology · Information Technology Services
Current price
$109.67
52-week range
$73.06 - $222.53
Market cap
$5.66B
Balance sheet
Healthy
301.10x Strong cushion
Net cash $637.15M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 2.9% last year.
- Reward Returns 11.2% on equity, ahead of 50% of its peers.
- Reward Free cash flow was positive in 10/10 years.
- Risk Operating margin compressed from 11.9% to 10.9% over 3 years.
What this company does
EPAM Systems, Inc.
EPAM Systems acts like an expert team of software engineers for hire, helping big companies in fields like finance and healthcare design, build, and manage their complex websites and applications. The company makes money by billing these clients for its technology consulting services. This is important because as businesses rely more heavily on technology to compete, they increasingly need specialized outside help to get it right.
How the company got here
EPAM was founded in 1993 by Arkadiy Dobkin and Leo Lozner, with roots in the software engineering talent of Belarus. Initially, the company focused on providing high-quality software development services to clients in North America and Europe. A key turning point was their early work for major companies like Colgate and SAP, which helped build their reputation. Over the years, EPAM expanded its services beyond basic software engineering to include digital strategy, consulting, and design, growing through both new client acquisition and strategic purchases of other companies. This evolution transformed it from a niche software provider into a global company that helps large businesses with their complex technology projects.
What it actually does
Think of EPAM as a team of expert builders for the digital world. When a large company, like a bank or a retailer, wants to create a new mobile app, update its website, or use technology to become more efficient, they hire EPAM to design, build, and manage the project. EPAM provides the skilled engineers and consultants who write the code, design the user experience, and ensure the technology works smoothly. They don't sell a specific software product off the shelf; instead, they provide customized services to solve each client's unique technology challenges.
Americas
This is EPAM's largest business segment, representing the work it does for clients based in North and South America. These clients come from various sectors, including finance, retail, and healthcare, and they pay EPAM for a wide range of technology services, from building new digital platforms to modernizing their existing software. While it's the biggest piece of the company's business, its growth has recently been slower than in other regions. This segment is crucial as it forms the foundation of EPAM's revenue (the total money a company brings in from sales).
Europe
This segment covers EPAM's services for clients located in Europe and is a significant and faster-growing part of the company. Similar to the Americas, clients here hire EPAM for complex software engineering, consulting, and digital transformation projects. The company has been actively expanding its presence in this region, partly through acquiring other technology firms to broaden its capabilities and client base. This focus on Europe helps diversify the company's business so it isn't overly reliant on a single geographic market.
APAC
Representing the Asia-Pacific region, this is currently the smallest part of EPAM's business. It provides the same digital engineering and consulting services to companies in this rapidly growing economic area. While it's a smaller slice of the overall pie, expanding in this region is part of EPAM's strategy for long-term growth. This segment allows the company to tap into new markets and work with emerging global companies.
What management is betting on now
EPAM's leadership is heavily focused on artificial intelligence (AI) and helping its clients use this technology to transform their businesses. They are investing in training their employees and forming partnerships with major AI players like OpenAI to create new services. The company is also concentrating on providing more integrated consulting, where they advise clients on business strategy in addition to building the technology. Another key priority is expanding their managed services, where they don't just build a system but also run and maintain it for the client over the long term.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$237.00M
FY2024 Q4
$114.53M
FY2025 Q1
$14.83M
FY2025 Q2
$43.37M
FY2025 Q3
$286.38M
FY2025 Q4
$268.11M
FY2026 Q1
$-54.22M
FY2026 Q2
$-17.64M
Revenue
$1.41B
Net income
$102.98M
Diluted EPS
1.97
Operating cash flow
$-2.42M
Free cash flow
$-17.64M
Fetching…
Sources
Revenue
$1.40B
Net income
$82.52M
Diluted EPS
1.52
Operating cash flow
$-36.36M
Free cash flow
$-54.22M
Fetching…
Sources
Revenue
$1.41B
Net income
$109.35M
Diluted EPS
1.97
Operating cash flow
$282.89M
Free cash flow
$268.11M
Fetching…
Sources
Revenue
$1.39B
Net income
$106.82M
Diluted EPS
1.91
Operating cash flow
$294.68M
Free cash flow
$286.38M
Fetching…
Sources
Revenue
$1.35B
Net income
$88.03M
Diluted EPS
1.56
Operating cash flow
$53.20M
Free cash flow
$43.37M
Fetching…
Sources
Revenue
$1.30B
Net income
$73.48M
Diluted EPS
1.28
Operating cash flow
$24.16M
Free cash flow
$14.83M
Fetching…
Sources
Revenue
$1.25B
Net income
$103.30M
Diluted EPS
1.80
Operating cash flow
$130.26M
Free cash flow
$114.53M
Fetching…
Sources
Revenue
$1.17B
Net income
$136.35M
Diluted EPS
2.37
Operating cash flow
$241.96M
Free cash flow
$237.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $200.90 vs current price $109.67
Wall Street consensus is the average analyst price target: $122.82 (-38.9% lower than our fair-value estimate).
Our most-likely fair value is $200.90 a share — about 83.2% above today's price of $109.67, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $637.2M - more cash than debt. Interest coverage 301.1x.
Net debt
$-637.15M
Interest coverage
301.10x
EPAM Systems, Inc.'s profit covers its interest bill about 301.1 times over. which is stronger than every peer shown here.
Healthy
Worse cushion
Baseline
Better cushion
EPAM
BASELINE
EPAM Systems, Inc.
Total debt $152.24M Interest coverage 301.10x This is the baseline the peer rows are being compared against.
Total debt $517.85M Interest coverage 6.18x -98% vs EPAM Carries about 48.7x less debt cushion than EPAM.
Total debt $315.66M Interest coverage 2.95x -99% vs EPAM Carries about 102.2x less debt cushion than EPAM.
Total debt $2.09B Interest coverage 89.92x -70% vs EPAM Carries about 3.3x less debt cushion than EPAM.
What you should know
The case for and against EPAM
3 Rewards
1 Risk
Rewards
-
Revenue grew 2.9% last year.
-
Returns 11.2% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Operating margin compressed from 11.9% to 10.9% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
14.86x
Forward P/E
7.80x
P/B
1.61x
P/S
1.01x
EV/EBITDA
6.99x
PEG ratio
0.58x
Profitability
How much profit each dollar creates
Gross margin
29.5%
Operating margin
10.9%
Net margin
7.2%
ROE
11.2%
ROA
8.5%
Health
Liquidity and balance-sheet strength
Debt / equity
0.04x
Current ratio
2.75x
Quick ratio
2.58x
Total debt
$152.24M
Total cash
$789.40M
Growth
How the business has been compounding
Revenue TTM
$5.62B
Revenue 5Y CAGR
9.8%
EPS TTM
7.38
EPS 5Y CAGR
-1.8%
Cash flow
How much cash the business throws off
Operating CF TTM
$538.79M
Free CF TTM
$612.69M
FCF margin
10.9%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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