EPAM Systems Inc (EPAM, Financial) has experienced a notable fluctuation in its stock price over recent periods. With a current market capitalization of $17.05 billion, the company's stock is trading at $295.56. Over the past week, EPAM's shares have seen a decline of 5.94%, yet this short-term loss contrasts with a significant gain of 17.52% over the past three months. According to GF Value, the stock is currently modestly undervalued at $409.67, a shift from the past GF Value of $604.22, which indicated the stock was significantly undervalued. This change in valuation suggests a positive adjustment in investor sentiment towards EPAM's intrinsic value.
Introduction to EPAM Systems Inc
EPAM Systems Inc operates within the competitive software industry. As a global IT services firm, EPAM specializes in platform engineering, software development, and consulting services. With North America as its largest market, accounting for around 60% of revenues, EPAM has been at the forefront of integrating new technologies such as artificial intelligence, virtual reality, and robotics into its service offerings. This strategic focus has positioned EPAM as a key player in the IT services sector.
Assessing EPAM's Profitability
EPAM's financial health is reflected in its impressive Profitability Rank of 10/10. The company's operating margin stands at 12.07%, outperforming 77.32% of its industry peers. Additionally, EPAM's return on equity (ROE) is 15.36%, return on assets (ROA) is 11.82%, and return on invested capital (ROIC) is 21.80%, each surpassing the majority of competitors within the industry. These figures not only demonstrate EPAM's ability to generate profits but also its efficiency in utilizing shareholders' equity and assets. The company has maintained profitability for the past 10 years, a testament to its consistent performance and business resilience.
EPAM's Growth Trajectory
EPAM's growth metrics are equally robust, with a Growth Rank of 10/10. The company's 3-year revenue growth rate per share is an impressive 27.00%, and its 5-year rate is 24.90%, both rates outpacing the majority of the industry. In terms of earnings, EPAM's 3-year EPS without NRI growth rate is 20.00%, and its 5-year rate is a remarkable 37.60%. These growth rates highlight EPAM's strong revenue and earnings expansion, which have consistently outperformed industry averages, indicating the company's successful execution of its growth strategy.
Notable Shareholders in EPAM
EPAM's stock is held by several prominent investors, signaling confidence in the company's prospects. Steve Mandel (Trades, Portfolio) holds 1,054,229 shares, representing 1.83% of the company, while Andreas Halvorsen (Trades, Portfolio) owns 918,497 shares, accounting for 1.59%. Steven Cohen (Trades, Portfolio) also has a stake in EPAM, with 195,650 shares, equating to 0.34%. The involvement of these significant shareholders suggests a strong belief in EPAM's value and future performance.
Competitive Landscape
When compared to its competitors, EPAM stands strong with its $17.05 billion market cap. Leidos Holdings Inc (LDOS, Financial) follows with a market cap of $14.88 billion, Jack Henry & Associates Inc (JKHY, Financial) at $11.96 billion, and Globant SA (GLOB, Financial) at $9.49 billion. EPAM's market position and capitalization reflect its competitive edge and industry leadership within the software sector.
Conclusion
In summary, EPAM Systems Inc's recent stock performance and valuation indicate a positive market adjustment to its intrinsic value. The company's stock, currently seen as modestly undervalued, has experienced a significant rally over the past three months despite a recent dip. EPAM's strong profitability and growth metrics, coupled with the confidence of significant shareholders, underscore its solid financial foundation and growth potential. When juxtaposed with its competitors, EPAM's market capitalization and industry position further affirm its status as a formidable player in the software industry.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
