One-glance verdict
Undervalued
$17.43 our estimate vs market $8.02
Wall Street consensus: $9.20 (-47.2% lower than our fair-value estimate)
54% below our estimate, below the bear case
Fundamentals snapshot
Grid Dynamics Holdings, Inc.
GDYN · NCM · Technology · Information Technology Services
Current price
$8.02
52-week range
$5.11 - $10.21
Market cap
$650.64M
Balance sheet
Healthy
-0.09x Concerning
Net cash $281.72M. 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 2.6% last year.
- Reward Returns 0.5% on equity, ahead of 20% of its peers.
- Reward Free cash flow was positive in 8/10 years.
- Risk Stock trades 1.5% above its 5-year average P/E.
What this company does
Grid Dynamics Holdings, Inc.
Grid Dynamics is a technology consulting company that helps other large businesses use artificial intelligence (AI, which is technology that can learn and make decisions like a human) to modernize their operations. They make money by charging for these expert services, helping clients in industries from retail to finance build smarter websites or more efficient internal systems. This is important because as nearly every company looks to adopt AI to stay competitive, the demand for Grid Dynamics' specialized skills could increase.
How the company got here
Founded in 2006, Grid Dynamics started as a specialized technology consulting firm. It grew by helping large companies tackle complex digital projects and went public on the Nasdaq stock exchange in 2020. A key part of its growth has been through acquisitions (buying other companies) to add new skills and expand into new regions, such as Europe and the Americas. This strategy has helped it become a global company with engineering talent located around the world.
What it actually does
Grid Dynamics doesn't sell a physical product you can buy in a store; it sells its expertise to other large companies. Think of them as a team of expert builders for the digital world. Big companies in retail, finance, and technology hire Grid Dynamics to design, build, and modernize the complex software that runs their businesses. This could mean creating a smoother online shopping experience, making a company's internal systems more efficient, or helping them use their data to make smarter decisions.
AI Services
This is the company's fastest-growing and most important business. Grid Dynamics helps its clients use artificial intelligence (AI), which is technology that can learn and make decisions like a human. They help companies figure out where AI can help, organize their data to make it useful for AI, and then build custom AI tools to automate tasks or discover new business insights. This segment makes money by charging for the time and expertise of its AI specialists and engineers, and it represents a significant and growing portion of the company's total revenue (the total money it brings in from sales).
Cloud & Platform Engineering
Many businesses have older software running on their own servers, which can be slow and expensive to maintain. Grid Dynamics helps these companies move their operations to the 'cloud' (a network of powerful, shared computers run by companies like Amazon or Google). This makes the business's technology more reliable, secure, and able to handle more customers. They get paid for planning and executing this complex migration and for building modern, cloud-based software platforms from scratch.
Digital Engagement
This part of the business focuses on building the technology that customers directly interact with. For a retail client, this could mean creating a new e-commerce website that is easy to use and offers personalized recommendations. For a bank, it might be a new mobile banking app. Grid Dynamics is paid to design and engineer these digital experiences to be more engaging and effective, helping their clients attract and keep customers.
Data & Analytics
Companies today collect vast amounts of data on everything from sales to customer behavior. This segment helps clients make sense of all that information. Grid Dynamics builds systems that gather, clean, and analyze data, turning it into easy-to-understand reports and insights. This helps management make better-informed decisions, like where to stock certain products or how to improve their marketing. The company earns revenue by providing the data science and engineering services needed to build and manage these systems.
What management is betting on now
The company's main focus is on becoming a leader in artificial intelligence (AI) services, seeing it as the biggest opportunity for growth. [3, 21] They are heavily investing in training their engineers and developing their own AI-building tools to help clients adopt the technology faster. [27, 29] At the same time, they are working to attract clients in more industries, like finance and manufacturing, to avoid being too dependent on any single area. [1, 17] Finally, they are expanding their physical presence across the globe, particularly in India and the Americas, to serve clients in different time zones and diversify their talent pool. [1, 17]
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
$5.93M
FY2024 Q4
$4.43M
FY2025 Q1
$6.01M
FY2025 Q2
$10.21M
FY2025 Q3
$2.95M
FY2025 Q4
$6.10M
FY2026 Q1
$4.43M
FY2026 Q2
$2.52M
Revenue
$108.16M
Net income
$2.85M
Diluted EPS
0.03
Operating cash flow
$6.10M
Free cash flow
$2.52M
Fetching…
Sources
Revenue
$104.10M
Net income
$-1.47M
Diluted EPS
-0.02
Operating cash flow
$8.39M
Free cash flow
$4.43M
Fetching…
Sources
Revenue
$106.15M
Net income
$306.00K
Diluted EPS
0.01
Operating cash flow
$9.90M
Free cash flow
$6.10M
Fetching…
Sources
Revenue
$104.16M
Net income
$1.18M
Diluted EPS
0.01
Operating cash flow
$6.97M
Free cash flow
$2.95M
Fetching…
Sources
Revenue
$101.09M
Net income
$5.27M
Diluted EPS
0.06
Operating cash flow
$14.38M
Free cash flow
$10.21M
Fetching…
Sources
Revenue
$100.42M
Net income
$2.91M
Diluted EPS
0.03
Operating cash flow
$9.35M
Free cash flow
$6.01M
Fetching…
Sources
Revenue
$100.28M
Net income
$4.52M
Diluted EPS
0.06
Operating cash flow
$7.07M
Free cash flow
$4.43M
Fetching…
Sources
Revenue
$87.44M
Net income
$4.28M
Diluted EPS
0.05
Operating cash flow
$9.21M
Free cash flow
$5.93M
Fetching…
Sources
Is it cheap or expensive?
Fair value $17.43 vs current price $8.02
Wall Street consensus is the average analyst price target: $9.20 (-47.2% lower than our fair-value estimate).
Our most-likely fair value is $17.43 a share — about 117.3% above today's price of $8.02, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $281.7M - more cash than debt. Interest coverage -0.1x.
Net debt
$-281.72M
Interest coverage
-0.09x
Grid Dynamics Holdings, Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here.
Healthy
Worse cushion
Baseline
Better cushion
GDYN
BASELINE
Grid Dynamics Holdings, Inc.
Total debt $16.71M Interest coverage -0.09x This is the baseline the peer rows are being compared against.
Total debt $517.85M Interest coverage 6.18x This peer still has a real interest-payment cushion, while GDYN does not.
Total debt $143.33M Interest coverage 4.59x This peer still has a real interest-payment cushion, while GDYN does not.
Total debt $83.03M Interest coverage 15.53x This peer still has a real interest-payment cushion, while GDYN does not.
Total debt $315.78M Interest coverage 2.95x This peer still has a real interest-payment cushion, while GDYN does not.
What you should know
The case for and against GDYN
3 Rewards
1 Risk
Rewards
-
Revenue grew 2.6% last year.
-
Returns 0.5% on equity, ahead of 20% of its peers.
-
Free cash flow was positive in 8/10 years.
Risks
-
Stock trades 1.5% above its 5-year average P/E.
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)
267.33x
Forward P/E
15.24x
P/B
1.25x
P/S
1.54x
EV/EBITDA
15.11x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
34.7%
Operating margin
3.6%
Net margin
0.7%
ROE
0.5%
ROA
0.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.03x
Current ratio
7.22x
Quick ratio
6.93x
Total debt
$16.71M
Total cash
$298.43M
Growth
How the business has been compounding
Revenue TTM
$422.58M
Revenue 5Y CAGR
18.2%
EPS TTM
0.03
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$31.36M
Free CF TTM
$25.27M
FCF margin
6.0%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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