In the fast-evolving technology landscape, choosing the right investment can feel overwhelming. Today, I will compare two prominent players: ServiceNow, Inc. (NOW) and EPAM Systems, Inc. (EPAM). Both companies operate within the technology sector, focusing on software solutions and digital services. Their innovative strategies and market overlaps make them intriguing candidates for investors. Join me as I explore which company could be the more compelling investment opportunity for your portfolio.
Table of contents
Company Overview
ServiceNow, Inc. Overview
ServiceNow, Inc. is a leader in enterprise cloud computing solutions, specializing in workflow automation and IT service management. Founded in 2004 and headquartered in Santa Clara, California, the company has positioned itself as a key player in the technology sector, with a market cap of approximately $169B. ServiceNow’s mission is to help organizations manage and automate their services through the Now platform, which integrates advanced technologies such as artificial intelligence and machine learning. The company serves a diverse clientele across various industries including healthcare, finance, and telecommunications, emphasizing a strong focus on governance, risk, and compliance solutions.
EPAM Systems, Inc. Overview
EPAM Systems, Inc., established in 1993 and located in Newtown, Pennsylvania, is a global provider of digital platform engineering and software development services. With a market cap of around $10.3B, EPAM’s mission revolves around delivering high-quality engineering services and innovative solutions to its clients. The company caters to a broad range of sectors, including financial services and healthcare, and aims to enhance customer experiences through digital transformation. EPAM stands out for its integrated engineering practices and cutting-edge technologies, such as artificial intelligence and robotics, positioning itself as a vital partner in the digital age.
Key similarities and differences
Both ServiceNow and EPAM operate in the technology sector, focusing on enhancing business operations through innovative software solutions. However, while ServiceNow centers on IT service management and workflow automation, EPAM emphasizes digital platform engineering and software development services, showcasing distinct approaches to addressing client needs.
Income Statement Comparison
The following table compares the income statements of ServiceNow, Inc. and EPAM Systems, Inc. for the most recent fiscal year, providing key financial metrics to support your investment decisions.
| Metric | ServiceNow, Inc. | EPAM Systems, Inc. |
|---|---|---|
| Market Cap | 169B | 10.33B |
| Revenue | 10.98B | 4.73B |
| EBITDA | 2.23B | 672M |
| EBIT | 1.76B | 545M |
| Net Income | 1.43B | 455M |
| EPS | 6.92 | 7.93 |
| Fiscal Year | 2024 | 2024 |
Interpretation of Income Statement
In the most recent fiscal year, ServiceNow reported a significant revenue increase to 10.98B, up from 8.97B in the previous year, while EPAM’s revenue saw a minor rise to 4.73B compared to 4.69B. Both companies maintained stable margins, with ServiceNow’s EBITDA margin improving slightly, indicating operational efficiency. Although ServiceNow’s net income decreased to 1.43B from 1.73B, this reflects ongoing investment in growth. Conversely, EPAM’s net income increased to 455M, suggesting a strong performance amidst a challenging environment. Overall, ServiceNow’s growth trajectory appears promising, albeit with caution on profitability trends, while EPAM’s stability is noteworthy in the current market.
Financial Ratios Comparison
Below is a comparative table showcasing the most recent revenue and financial ratios for ServiceNow, Inc. (NOW) and EPAM Systems, Inc. (EPAM).
| Metric | ServiceNow (NOW) | EPAM Systems (EPAM) |
|---|---|---|
| ROE (%) | 14.83 | 12.52 |
| ROIC (%) | 9.22 | 10.67 |
| P/E | 153.13 | 29.47 |
| P/B | 22.71 | 3.69 |
| Current Ratio | 1.10 | 2.96 |
| Quick Ratio | 1.10 | 2.96 |
| D/E | 0.24 | 0.05 |
| Debt-to-Assets (%) | 11.18 | 3.44 |
| Interest Coverage | 59.30 | N/A |
| Asset Turnover | 0.54 | 0.99 |
| Fixed Asset Turnover | 4.47 | 14.07 |
| Payout Ratio (%) | 0 | 0 |
| Dividend Yield (%) | 0 | 0 |
Interpretation of Financial Ratios
ServiceNow exhibits a high P/E ratio, indicating strong growth expectations but also potentially overvaluation risk. Its liquidity ratios (current and quick) are solid, but its debt levels (D/E and debt-to-assets) are higher compared to EPAM. In contrast, EPAM shows a more favorable asset turnover and lower P/E, suggesting it may be undervalued. Overall, both companies present unique investment considerations based on these ratios, but caution is warranted given the differing risk profiles.
Dividend and Shareholder Returns
Neither ServiceNow, Inc. (NOW) nor EPAM Systems, Inc. (EPAM) currently pays dividends, as indicated by a 0% dividend payout ratio. Both companies are in a high-growth phase, prioritizing reinvestment in their operations and expansion. They do engage in share buyback programs, which can enhance shareholder value. This strategy supports long-term value creation, although the absence of dividends may deter income-focused investors.
Strategic Positioning
ServiceNow, Inc. (NOW) holds a significant market share in the enterprise cloud computing sector, particularly in IT service management, with a market cap of $169B. Its robust platform automation solutions face competitive pressure from emerging startups and established players. Meanwhile, EPAM Systems, Inc. (EPAM), valued at $10.3B, specializes in digital platform engineering and competes fiercely with larger firms in IT services. Both companies must navigate technological disruptions, including AI advancements, to maintain their competitive advantages.
Stock Comparison
In the past year, the stock prices of ServiceNow, Inc. (NOW) and EPAM Systems, Inc. (EPAM) have demonstrated significant movements, reflecting the underlying trading dynamics and market sentiment towards these companies.
Trend Analysis
For ServiceNow, Inc. (NOW), the overall price change over the past year is +20.15%, indicating a bullish trend. Despite this positive movement, the recent trend from September 14, 2025, to November 30, 2025, has seen a price decline of -12.55%, suggesting a bearish sentiment in the short term. The highest price reached was 1124.98, while the lowest was 656.93. The trend is characterized by deceleration, with a standard deviation of 116.45, indicating notable volatility.
In contrast, EPAM Systems, Inc. (EPAM) has experienced a significant overall price decline of -35.26%, marking a bearish trend. However, the recent analysis from September 14, 2025, to November 30, 2025, shows a recovery with a price change of +19.8%. The highest price recorded was 311.98, and the lowest was 142.38. This recent upward movement is coupled with acceleration, with a standard deviation of 14.09, suggesting some level of stability amidst previous volatility.
Analyst Opinions
Recent analyst recommendations for ServiceNow, Inc. (NOW) suggest a “Buy” rating, with analysts emphasizing strong returns on equity and assets, despite a lower score in price-to-earnings metrics. In contrast, EPAM Systems, Inc. (EPAM) has received a “Buy” rating as well, with analysts highlighting its solid cash flow and asset returns. Both ratings reflect a consensus leaning toward “Buy” for 2025, indicating positive expectations for these companies’ growth trajectories. Notable analysts have provided these insights, reinforcing confidence in their investment potential.
Stock Grades
I have gathered the latest stock grades from reliable grading companies for two companies: ServiceNow, Inc. (NOW) and EPAM Systems, Inc. (EPAM). Here’s a look at how these stocks are currently rated.
ServiceNow, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| JP Morgan | maintain | Overweight | 2025-10-30 |
| Canaccord Genuity | maintain | Buy | 2025-10-30 |
| TD Cowen | maintain | Buy | 2025-10-30 |
| UBS | maintain | Buy | 2025-10-30 |
| Wells Fargo | maintain | Overweight | 2025-10-30 |
| Barclays | maintain | Overweight | 2025-10-30 |
| Citigroup | maintain | Buy | 2025-10-30 |
| UBS | maintain | Buy | 2025-10-14 |
| Morgan Stanley | upgrade | Overweight | 2025-09-24 |
| JMP Securities | maintain | Market Outperform | 2025-08-04 |
EPAM Systems, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Mizuho | maintain | Outperform | 2025-11-11 |
| JP Morgan | maintain | Overweight | 2025-11-07 |
| Morgan Stanley | maintain | Equal Weight | 2025-09-09 |
| JP Morgan | maintain | Overweight | 2025-08-20 |
| Barclays | maintain | Overweight | 2025-05-12 |
| Needham | maintain | Buy | 2025-05-09 |
| Guggenheim | maintain | Buy | 2025-05-09 |
| Piper Sandler | maintain | Neutral | 2025-05-09 |
| Morgan Stanley | maintain | Equal Weight | 2025-05-09 |
| Stifel | maintain | Buy | 2025-05-02 |
Overall, both companies are receiving consistent ratings of “Overweight” and “Buy” from multiple grading companies, indicating a positive sentiment in the market. ServiceNow shows a trend of maintaining high grades, while EPAM has a strong outlook as well, with several “Outperform” ratings suggesting potential for growth. Investors should consider these insights in their portfolio decisions.
Target Prices
The current target price consensus reflects positive expectations for both ServiceNow, Inc. and EPAM Systems, Inc.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| ServiceNow, Inc. | 1,315 | 860 | 1,172.71 |
| EPAM Systems, Inc. | 185 | 175 | 180 |
For ServiceNow, Inc., the consensus target price of 1,172.71 indicates a significant upside potential compared to its current price of 812.41. Meanwhile, EPAM Systems, Inc. has a target consensus of 180, suggesting it is currently trading close to its expected value of 187.
Strengths and Weaknesses
Below is a summary of the strengths and weaknesses of ServiceNow, Inc. (NOW) and EPAM Systems, Inc. (EPAM):
| Criterion | ServiceNow, Inc. (NOW) | EPAM Systems, Inc. (EPAM) |
|---|---|---|
| Diversification | High | Moderate |
| Profitability | Strong (Net Margin: 12.97%) | Moderate (Net Margin: 8.89%) |
| Innovation | High | Moderate |
| Global presence | Extensive | Strong |
| Market Share | Leading | Growing |
| Debt level | Low (Debt to Equity: 0.24) | Very Low (Debt to Equity: 0.05) |
In summary, ServiceNow shows strong profitability and innovation with a high level of diversification, while EPAM maintains a low debt level with a growing market presence. Investors should consider these factors to assess their potential investments.
Risk Analysis
In the following table, I outline the potential risks associated with each company and their implications for investors.
| Metric | ServiceNow, Inc. | EPAM Systems, Inc. |
|---|---|---|
| Market Risk | Medium | High |
| Regulatory Risk | Low | Medium |
| Operational Risk | Medium | Medium |
| Environmental Risk | Low | Low |
| Geopolitical Risk | High | Medium |
Both companies face significant market and geopolitical risks, primarily due to their reliance on global markets. ServiceNow’s exposure is more controlled, while EPAM’s operations are more sensitive to geopolitical tensions, particularly in Eastern Europe.
Which one to choose?
When comparing ServiceNow, Inc. (NOW) and EPAM Systems, Inc. (EPAM), both companies exhibit strong fundamentals but with differing risk profiles and growth potentials. ServiceNow boasts a gross profit margin of 79.2% and a high return on equity (RoE) of 14.8%, indicating efficient profit generation. However, its price-to-earnings (P/E) ratio of 153.1 suggests it may be overvalued. Conversely, EPAM, with a lower P/E of 29.5 and a solid gross margin of 30.7%, presents a more attractive valuation, albeit with a bearish trend reflecting recent price declines.
For investors focused on growth, NOW may appeal due to its strong margins and growth trajectory. In contrast, those prioritizing value and stability might find EPAM more suitable, especially given its lower valuation metrics. However, potential risks such as competition in the tech sector and market volatility could impact both companies’ performance.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Go further
I encourage you to read the complete analyses of ServiceNow, Inc. and EPAM Systems, Inc. to enhance your investment decisions:
