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EPAM Systems, Inc. transforms how businesses harness digital technology, delivering cutting-edge software engineering and platform solutions that power industries worldwide. As a dominant force in information technology services, EPAM excels in digital platform engineering, smart automation, and advanced consulting, serving sectors from finance to healthcare. Renowned for innovation and quality, the company continuously expands its market influence. Yet, in today’s evolving tech landscape, the key question remains: do EPAM’s fundamentals justify its current valuation and growth prospects?
Table of contents
Business Model & Company Overview
EPAM Systems, Inc., founded in 1993 and headquartered in Newtown, Pennsylvania, stands as a leader in Information Technology Services with a workforce of 61,200 employees. It delivers a cohesive ecosystem of digital platform engineering, software development, and consulting services, covering everything from requirements analysis to smart automation and physical product development such as AI and robotics. EPAM’s integrated approach serves diverse industries including financial services, healthcare, and hi-tech, positioning it as a critical partner in digital transformation worldwide.
The company’s revenue engine balances comprehensive engineering services with infrastructure management and ongoing maintenance, supported by digital and technical advisory consulting. EPAM’s global footprint spans the Americas, Europe, and Asia, enabling it to capture demand in key markets. Its ability to blend software innovation with operational solutions forms a robust competitive advantage, underpinning its economic moat and shaping the future of technology services.
Financial Performance & Fundamental Metrics
This section analyzes EPAM Systems, Inc.’s income statement, key financial ratios, and dividend payout policy to assess its overall financial health and stability.
Income Statement
The table below presents EPAM Systems, Inc.’s key income statement figures over the past five fiscal years, showing trends in revenue, profitability, and earnings per share.
| 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|
| Revenue | 2.66B | 3.76B | 4.82B | 4.69B | 4.73B |
| Cost of Revenue | 1.73B | 2.48B | 3.29B | 3.26B | 3.28B |
| Operating Expenses | 548M | 732M | 965M | 933M | 906M |
| Gross Profit | 927M | 1.27B | 1.54B | 1.43B | 1.45B |
| EBITDA | 509M | 680M | 713M | 660M | 672M |
| EBIT | 379M | 535M | 573M | 527M | 545M |
| Interest Expense | 0 | 1.7M | 0 | 0 | 0 |
| Net Income | 327M | 482M | 419M | 417M | 455M |
| EPS | 5.87 | 8.52 | 7.32 | 7.21 | 7.93 |
| Filing Date | 2021-02-25 | 2022-02-25 | 2023-02-24 | 2024-02-22 | 2025-02-28 |
Income Statement Evolution
From 2020 to 2024, EPAM Systems, Inc. experienced a 77.78% increase in revenue, reflecting strong top-line growth, although the 0.8% growth in 2024 was unfavorable, indicating a slowdown. Net income grew by 38.93% over the period, with net margin declining by 21.85%, signaling some margin pressure despite overall profitability. Gross and EBIT margins remained favorable at 30.68% and 11.52%, respectively, showing operational efficiency.
Is the Income Statement Favorable?
In 2024, EPAM reported revenue of $4.73B and net income of $455M, with a net margin of 9.61%, marking an 8.12% improvement in net margin year-over-year. EBIT margin stood at a favorable 11.52%, supported by stable operating expenses relative to revenue growth. Absence of interest expenses further strengthens the fundamentals. Overall, 71.43% of income statement metrics are favorable, indicating a generally positive financial position.
Financial Ratios
The table below presents key financial ratios for EPAM Systems, Inc. over the fiscal years 2020 to 2024, offering insights into profitability, liquidity, leverage, and valuation metrics:
| Ratios | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Margin | 12% | 13% | 9% | 9% | 10% |
| ROE | 16% | 19% | 14% | 12% | 13% |
| ROIC | 14% | 17% | 14% | 10% | 11% |
| P/E | 61 | 78 | 45 | 41 | 29 |
| P/B | 10 | 15 | 6 | 5 | 4 |
| Current Ratio | 4.1 | 3.0 | 3.7 | 4.8 | 3.0 |
| Quick Ratio | 4.1 | 3.0 | 3.7 | 4.8 | 3.0 |
| D/E | 0.13 | 0.10 | 0.06 | 0.05 | 0.04 |
| Debt-to-Assets | 10% | 7% | 5% | 4% | 3% |
| Interest Coverage | 0 | 314 | 0 | 0 | 0 |
| Asset Turnover | 0.98 | 1.07 | 1.20 | 1.08 | 1.00 |
| Fixed Asset Turnover | 6.7 | 8.9 | 11.4 | 12.7 | 14.1 |
| Dividend Yield | 0% | 0% | 0% | 0% | 0% |
Evolution of Financial Ratios
Over the recent years, EPAM Systems’ Return on Equity (ROE) showed a downward trend from 19.37% in 2021 to 12.52% in 2024, indicating slowing profitability growth. The Current Ratio fluctuated, peaking at 4.79 in 2023 before settling at 2.96 in 2024, reflecting a decrease in short-term liquidity. Meanwhile, the Debt-to-Equity Ratio steadily declined from 0.10 in 2021 to 0.04 in 2024, signaling reduced leverage and financial risk.
Are the Financial Ratios Favorable?
In 2024, EPAM’s profitability ratios such as net margin (9.61%) and ROE (12.52%) are rated neutral, while return on invested capital (10.67%) and WACC (11.88%) are unfavorable, suggesting challenges in value creation. Liquidity metrics, including a current ratio of 2.96 and quick ratio of 2.96, are favorable, supporting strong short-term financial health. Leverage remains low with a debt-to-equity ratio of 0.04, which is also favorable. Market valuation ratios like P/E at 29.47 and P/B at 3.69 are unfavorable, reflecting relatively high market expectations. Overall, the ratios present a slightly favorable financial profile.
Shareholder Return Policy
EPAM Systems, Inc. does not pay dividends, reflecting a reinvestment strategy likely aimed at supporting growth and innovation. The company’s dividend payout ratio and yield remain at zero, with no indication of share buyback programs reported.
This approach aligns with prioritizing long-term shareholder value creation through operational reinvestment rather than immediate cash returns. The absence of distributions supports a focus on sustainable growth, given EPAM’s positive margins and free cash flow metrics.
Score analysis
Here is a radar chart illustrating the company’s key financial scores and valuation metrics:
EPAM Systems shows favorable scores in discounted cash flow, return on assets, and debt to equity, while return on equity and price to book are moderate. The price to earnings score is the lowest, indicating some valuation caution.
Analysis of the company’s bankruptcy risk
The Altman Z-Score indicates that EPAM Systems is well within the safe zone, suggesting a very low risk of bankruptcy:
Is the company in good financial health?
The Piotroski Score diagram below reflects the company’s financial strength based on nine key criteria:
With a score of 7, EPAM Systems is considered strong financially, demonstrating good profitability, leverage, liquidity, and operational efficiency.
Competitive Landscape & Sector Positioning
This section provides an overview of EPAM Systems, Inc.’s strategic positioning, revenue segments, key products, and main competitors within the technology sector. I will assess whether EPAM holds a competitive advantage compared to its industry peers.
Strategic Positioning
EPAM Systems, Inc. maintains a diversified product portfolio across multiple sectors including financial services, consumer goods, healthcare, and software, with revenues ranging from $575M to $1B per sector in 2024. Geographically, it has a broad exposure, generating $2.68B in the US and significant revenues in Europe and other regions.
Revenue by Segment
This pie chart illustrates EPAM Systems’ revenue distribution across various industry sectors for the fiscal year 2024.
In 2024, the Financial Services Sector ($1.02B) and Consumer Goods, Retail & Travel ($1.01B) continue to be EPAM’s primary revenue drivers, closely followed by the Software and Hi-Tech Sector ($702M). While the Financial Services Sector showed slight growth, Consumer Goods experienced a modest decline compared to 2023. Emerging Vertical Sector revenue increased to $741M, indicating a strategic focus there. Overall, the company’s revenue mix remains diversified with no excessive concentration risk.
Key Products & Brands
The table below summarizes EPAM Systems, Inc.’s key products and service segments as of fiscal year 2024:
| Product | Description |
|---|---|
| Engineering Services | Includes requirements analysis, platform selection, customization, cross-platform migration, implementation, integration. |
| Infrastructure Management Services | Software development, testing, maintenance for application, database, network, server, storage, and systems operations. |
| Maintenance and Support Services | Ongoing software maintenance, support, monitoring, incident notification, and resolution. |
| Operation Solutions | Integrated engineering practices and smart automation. |
| Optimization Solutions | Software testing, test management, automation, consulting to improve quality assurance and security. |
| Consulting Services | Business, experience, technology, data, and technical advisory consulting. |
| Digital and Service Design Solutions | Strategy, design, creative program management, and physical product development including AI, robotics, VR. |
| Revenue by Industry Verticals | Financial Services (1.02B), Consumer Goods, Retail & Travel (1.01B), Software and Hi-Tech (702M), Emerging Verticals (741M), Healthcare (575M), Business Information and Media (675M) |
EPAM Systems offers a broad range of software engineering and IT services with specialization in digital platform engineering and consulting. Its diversified revenue base spans key industry verticals including financial services, consumer sectors, healthcare, and technology.
Main Competitors
EPAM Systems, Inc. faces competition from a total of 16 companies, with the table below showing the top 10 leaders by market capitalization:
| Competitor | Market Cap. |
|---|---|
| International Business Machines Corporation (IBM) | 272B |
| Accenture plc (ACN) | 162B |
| Cognizant Technology Solutions Corporation (CTSH) | 40B |
| Fiserv, Inc. (FISV) | 36B |
| Fidelity National Information Services, Inc. (FIS) | 34B |
| Wipro Limited (WIT) | 30B |
| Leidos Holdings, Inc. (LDOS) | 23B |
| Gartner, Inc. (IT) | 18B |
| CDW Corporation (CDW) | 17B |
| Jack Henry & Associates, Inc. (JKHY) | 13B |
EPAM Systems, Inc. ranks 11th among its 16 competitors, holding about 4.42% of the market cap of the sector leader, IBM. The company’s market capitalization is below both the average market cap of the top 10 competitors (approximately 64.6B) and the median market cap of the sector (about 17.8B). EPAM also maintains a 7.76% market cap gap from the closest competitor above it, indicating a moderate distance in scale within its peer group.
Comparisons with competitors
Check out how we compare the company to its competitors:
Does EPAM have a competitive advantage?
EPAM Systems, Inc. currently does not present a competitive advantage, as it is experiencing declining profitability and a return on invested capital (ROIC) below its weighted average cost of capital (WACC), indicating value destruction. Its ROIC trend over 2020-2024 is negative, reflecting decreasing efficiency in capital use and a very unfavorable moat status.
Looking ahead, EPAM offers a broad range of digital platform engineering and software development services with potential growth opportunities across financial services, healthcare, and other sectors. The company’s expansion into advanced technologies like artificial intelligence, robotics, and virtual reality could support future market diversification and product innovation.
SWOT Analysis
This SWOT analysis highlights EPAM Systems, Inc.’s key factors to inform investment decisions by assessing internal capabilities and external market conditions.
Strengths
- Strong global client base with diversified industry exposure
- Favorable gross and net margins indicating operational efficiency
- Solid liquidity and low debt levels supporting financial stability
Weaknesses
- Declining ROIC and value destruction trend
- High valuation multiples (PE and PB) may deter value-focused investors
- No dividend yield limiting income appeal
Opportunities
- Expanding digital transformation demand across industries
- Growing presence in North America and Europe markets
- Potential to enhance AI and automation service offerings
Threats
- Intense competition in IT services sector
- Economic uncertainty affecting client budgets
- Geopolitical risks impacting global operations
Overall, EPAM shows operational strength and growth potential, but value destruction and high valuation require cautious monitoring. Strategic focus should be on improving profitability and leveraging technological innovation to sustain competitive advantage.
Stock Price Action Analysis
The weekly stock chart below illustrates EPAM Systems, Inc.’s price movements and key price levels over the analyzed timeframe:
Trend Analysis
Over the past 12 months, EPAM’s stock price declined by 28.88%, indicating a bearish trend with accelerating downward momentum. The price fluctuated widely, reflected in a high standard deviation of 37.63. The stock hit a high of 309.4 and a low of 142.38, confirming significant volatility during this period.
Volume Analysis
Trading volume for EPAM has been increasing, with buyers accounting for 55.12% of total volume overall. In the recent 2.5-month period, buyer dominance surged to 85.2%, signaling strongly buyer-driven activity. This heightened participation suggests growing investor interest and confidence in the stock’s short-term prospects.
Target Prices
The consensus among analysts for EPAM Systems, Inc. suggests a moderately optimistic outlook.
| Target High | Target Low | Consensus |
|---|---|---|
| 247 | 175 | 214 |
Analysts expect EPAM’s stock price to range between 175 and 247, with a consensus target around 214, indicating potential upside from current levels.
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Analyst & Consumer Opinions
This section examines the latest analyst ratings and consumer feedback regarding EPAM Systems, Inc.’s market performance.
Stock Grades
Here is a summary of the latest stock grades for EPAM Systems, Inc. from well-known financial institutions, reflecting current analyst views:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Wells Fargo | Maintain | Overweight | 2026-01-14 |
| TD Cowen | Maintain | Buy | 2026-01-09 |
| 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 |
| Morgan Stanley | Maintain | Equal Weight | 2025-05-09 |
| Guggenheim | Maintain | Buy | 2025-05-09 |
| Piper Sandler | Maintain | Neutral | 2025-05-09 |
Most analysts maintain positive or neutral outlooks on EPAM, with a strong consensus leaning toward “Buy” and “Overweight” ratings, while a smaller group holds “Equal Weight” or “Neutral” stances, indicating cautious optimism.
Consumer Opinions
Consumers generally express a balanced view of EPAM Systems, Inc., appreciating its technical expertise while noting areas for improvement.
| Positive Reviews | Negative Reviews |
|---|---|
| Strong technical skills and innovative solutions. | Customer support can be slow and unresponsive. |
| Reliable project delivery and good communication. | Some clients report occasional delays in timelines. |
| High-quality software development and customization. | Pricing can be higher compared to competitors. |
Overall, EPAM is praised for its technical proficiency and dependable project execution, but customers frequently mention concerns about support responsiveness and cost.
Risk Analysis
Below is a summary table highlighting key risks associated with EPAM Systems, Inc., including their likelihood and potential impact:
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Volatility | EPAM’s beta of 1.73 indicates higher sensitivity to market swings, increasing share price risk | High | High |
| Valuation Risk | Elevated P/E (29.47) and P/B (3.69) ratios suggest stock may be overvalued | Moderate | Moderate |
| Profitability | Unfavorable ROIC (10.67%) and WACC (11.88%) imply returns may not sufficiently exceed costs | Moderate | Moderate |
| Competitive Pressure | Intense competition in IT services could impact growth and margins | Moderate | High |
| Dividend Policy | No dividend payout may deter income-focused investors | Low | Low |
| Financial Health | Strong Altman Z-Score (8.68) and Piotroski Score (7) indicate low bankruptcy risk | Low | Low |
The most significant risks for EPAM lie in its market volatility and competitive pressures, which can impact stock price and earnings. Despite solid financial health markers, valuation and profitability concerns warrant cautious monitoring.
Should You Buy EPAM Systems, Inc.?
EPAM Systems, Inc. appears to be delivering moderate profitability amid a very unfavorable competitive moat marked by declining value creation. Despite a strong leverage profile and favorable financial ratings (A-), operational efficiency could be further scrutinized for sustained growth prospects.
Strength & Efficiency Pillars
EPAM Systems, Inc. exhibits solid financial health and operational efficiency, underpinned by an Altman Z-score of 8.68, placing it comfortably in the safe zone against bankruptcy risks. The Piotroski score of 7 further attests to the company’s strong financial condition. Profitability metrics show a net margin of 9.61% and a return on equity of 12.52%, both indicating steady earnings generation. Although the return on invested capital (ROIC) at 10.67% trails the weighted average cost of capital (WACC) at 11.88%, signaling value erosion rather than creation, the company maintains robust liquidity with a current ratio of 2.96 and minimal leverage (debt-to-equity of 0.04).
Weaknesses and Drawbacks
EPAM faces valuation and market pressure challenges that warrant caution. The price-to-earnings ratio stands elevated at 29.47, signaling a premium valuation that may limit upside potential. A price-to-book ratio of 3.69 also suggests the stock trades above its net asset value, adding to valuation concerns. Despite low leverage, the bearish overall stock trend with a 28.88% decline and recent acceleration in price volatility (standard deviation of 37.63) pose risks. However, recent buyer dominance at 85.2% could indicate short-term bullish sentiment, albeit following a prolonged downtrend.
Our Verdict about EPAM Systems, Inc.
The long-term fundamental profile of EPAM appears moderately favorable, supported by strong financial health and profitability. While the overall stock trend remains bearish, the recent period shows strong buyer dominance and price recovery, suggesting potential for stabilization. Despite these positive signals, the premium valuation and value destruction indicated by ROIC below WACC suggest that investors might consider a wait-and-see approach for a more attractive entry point. The profile may appear suitable for those seeking exposure with a cautious stance on timing.
Disclaimer: This content is for informational purposes only and does not constitute financial, investment, or other professional advice. Investing in financial markets involves a significant risk of loss, and past performance is not indicative of future results.
Additional Resources
- EPAM Systems Deepens Enterprise AI Push With Cursor And Google Cloud Agents – Sahm (Jan 24, 2026)
- What EPAM Systems (EPAM)’s Generative AI Partnerships and Cloud Launches Mean For Shareholders – Yahoo Finance (Jan 23, 2026)
- EPAM Systems, Inc. $EPAM Shares Sold by Sumitomo Mitsui Trust Group Inc. – MarketBeat (Jan 20, 2026)
- EPAM Systems Inc (EPAM) Shares Up 3.54% on Jan 21 – GuruFocus (Jan 22, 2026)
- Should EPAM’s AI-Native Engineering Push With Cursor Partnership Require Action From EPAM (EPAM) Investors? – simplywall.st (Jan 22, 2026)
For more information about EPAM Systems, Inc., please visit the official website: epam.com
