Epam Systems, Inc.

EPAM

Services-Computer Programming Services

Mkt Cap

$10.25B

PE

23.78

Debt

$25.79M

Cash

$1.99B

EV

$8.287B

FCF

$578M

Market Cap

$10.25B

P/E Ratio

23.78

Debt

$25.79M

Cash

$1.99B

EV

$8.287B

FCF

$578M

Charts data: {"Earnings":[{"time":"2014-12-30","value":69641000},{"time":"2015-12-30","value":84456000},{"time":"2016-12-30","value":99266000},{"time":"2017-12-30","value":72760000},{"time":"2018-12-30","value":240256000},{"time":"2019-12-30","value":261057000},{"time":"2020-12-30","value":327160000},{"time":"2021-12-30","value":481652000},{"time":"2022-12-30","value":419416000},{"time":"2023-12-30","value":417083000}],"Sales":[{"time":"2014-12-30","value":730027000},{"time":"2015-12-30","value":914128000},{"time":"2016-12-30","value":1160132000},{"time":"2017-12-30","value":1450448000},{"time":"2018-12-30","value":1842912000},{"time":"2019-12-30","value":2293798000},{"time":"2020-12-30","value":2659478000},{"time":"2021-12-30","value":3758144000},{"time":"2022-12-30","value":4824698000},{"time":"2023-12-30","value":4690540000}],"Net Margins":[{"time":"2014-12-30","value":0.095395101825001},{"time":"2015-12-30","value":0.09238968722104562},{"time":"2016-12-30","value":0.08556440129226674},{"time":"2017-12-30","value":0.05016381145687401},{"time":"2018-12-30","value":0.130367592158497},{"time":"2019-12-30","value":0.11380993444060898},{"time":"2020-12-30","value":0.12301662205891532},{"time":"2021-12-30","value":0.12816219921322866},{"time":"2022-12-30","value":0.08693103692707813},{"time":"2023-12-30","value":0.08892003905733668}],"Assets":[{"time":"2014-12-30","value":594026000},{"time":"2015-12-30","value":778536000},{"time":"2016-12-30","value":925811000},{"time":"2017-12-30","value":1250256000},{"time":"2018-12-30","value":1611802000},{"time":"2019-12-30","value":2244208000},{"time":"2020-12-30","value":2721332000},{"time":"2021-12-30","value":3523227000},{"time":"2022-12-30","value":4009151000},{"time":"2023-12-30","value":4352365000}],"Stockholders Equity":[{"time":"2014-12-30","value":464050000},{"time":"2015-12-30","value":613223000},{"time":"2016-12-30","value":781412000},{"time":"2017-12-30","value":974947000},{"time":"2018-12-30","value":1262596000},{"time":"2019-12-30","value":1596145000},{"time":"2020-12-30","value":1983018000},{"time":"2021-12-30","value":2495837000},{"time":"2022-12-30","value":3003010000},{"time":"2023-12-30","value":3471470000}],"ROE":[{"time":"2014-12-30","value":0.15007219049671372},{"time":"2015-12-30","value":0.13772477548950382},{"time":"2016-12-30","value":0.12703413820110263},{"time":"2017-12-30","value":0.07462969781947121},{"time":"2018-12-30","value":0.19028731280631334},{"time":"2019-12-30","value":0.1635546895802073},{"time":"2020-12-30","value":0.1649808524178802},{"time":"2021-12-30","value":0.1929821538826454},{"time":"2022-12-30","value":0.139665202580078},{"time":"2023-12-30","value":0.12014593241479835}],"ROA":[{"time":"2014-12-30","value":0.1450828751603465},{"time":"2015-12-30","value":0.13611059732626365},{"time":"2016-12-30","value":0.14440960412006337},{"time":"2017-12-30","value":0.13832847032927656},{"time":"2018-12-30","value":0.15247778573298706},{"time":"2019-12-30","value":0.13494738455615524},{"time":"2020-12-30","value":0.13938909328226032},{"time":"2021-12-30","value":0.15392593210712793},{"time":"2022-12-30","value":0.1429145472445413},{"time":"2023-12-30","value":0.12328584574133833}]}

EPAM Systems, Inc. provides digital platform engineering and software development services worldwide. The company offers engineering services, including requirements analysis and platform selection, customization, cross-platform migration, implementation, and integration; infrastructure management services, such as software development, testing, and maintenance with private, public, and infrastructure management for application, database, network, server, storage, and systems operations management, as well as monitoring, incident notification, and resolution services; and maintenance and support services. It also provides operation solutions comprising integrated engineering practices and smart automation; and optimization solutions that include software application testing, test management, automation, and consulting services to enable customers enhance their existing software testing and quality assurance practices, as well as other testing services that identify threats and close loopholes to protect its customers' business systems from information loss. In addition, the company offers business, experience, technology, data, and technical advisory consulting services; and digital and service design solutions, which comprise strategy, design, creative, and program management services, as well as physical product development, such as artificial intelligence, robotics, and virtual reality. The company serves the financial services, travel and consumer, software and hi-tech, business information and media, life sciences and healthcare, and other industries EPAM Systems, Inc. was founded in 1993 and is headquartered in Newtown, Pennsylvania.

Sector

10-Q
9/30/23
10-Q
6/30/23
10-Q
3/31/23
10-K
12/31/22
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3/31/22
10-K
12/31/21
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9/30/21
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3/31/21
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12/31/20
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3/31/20
10-K
12/31/19
10-Q
9/30/19
10-Q
6/30/19
10-Q
3/31/19
10-K
12/31/18
10-Q
9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Epam Systems, Inc.

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$578M	$737.2M	$921.9M	$1.13B	$1.356B	$1.594B	$1.833B	$2.063B	$2.269B	$2.439B	$2.561B	$25.61B
DCF		$641.1M	$697.1M	$742.8M	$775.3M	$792.3M	$792.5M	$775.4M	$741.8M	$693.4M	$633.1M	$6.331B
Value	$13.62B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 28%

Earnings Stability 91%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been decreasing indicating a lower marginal ROA with respect to the calculated one, this could impede growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	9.2%	8.6%	5%	13%	11%	12%	13%	8.7%	8.9%	9.3%
ROA	14%	14%	14%	15%	13%	14%	15%	14%	12%	12%
ROE	14%	13%	7.5%	19%	16%	16%	19%	14%	12%	12%

What is the average Net Margin?

The average Net Margin over the past 5 years is +11.19%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is -0.81%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +14.12%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is -0.31%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +16.19%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -1.13%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Under the assumption that FCF does not diminish and debt does not increase, the current years to repay the debt are acceptable.

The Graham’s stability indicate reliability of earnings, and consideration about the future are more dependable.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	0.55	0.18	0.15	0.10	0.13	0.05	0.10	0.08	0.05	0.04
Debt Equity	0.06	0.03	0.03	0.02	0.02	0.01	0.02	0.01	0.01	0.01
MIN
Graham Stability	-	-	86%	100%	100%	100%	100%	100%	100%	86%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 0.04.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -0.01.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.86.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has not been increasing in the past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	22%	21%	21%	-2.8%	-1.4%
Net Income	23%	12%	8.4%	-0.56%	-3.9%
Stockholders Equity	24%	22%	21%	16%	-1.5%
FCF	22%	16%	3.9%	40%	-0.99%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +20.54%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is -1.44%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +11.66%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -3.93%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +22.42%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -1.51%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +15.97%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -0.99%.