EPAMEPAM
US • —
$89.85
P/E
12.89
PEG
—
FCF Yield
13.6%
Rev Growth YoY
+14.2% YoY
Gross Margin
29.1%
Health Score
8/10
D/E Ratio
0.01
Confidence
MEDIUM
Business Snapshot
EPAM Systems is a global provider of digital platform engineering and software development services, delivering custom application development, product engineering, and consulting to enterprise clients. The company operates in the highly competitive IT services and consulting market, positioning itself as a niche leader focused on complex, high-value engineering work rather than low-cost body-shopping. With a market capitalisation of $4.50B, EPAM is a mid-cap player with an estimated scale of operations that supports significant free cash flow generation. Its defining characteristic is a fortress-like balance sheet with nearly zero debt and a high FCF yield, setting it apart from more leveraged peers in the IT services space.
Financial Health
Gross margin of 29.1% and net margin of 7.0% indicate a reasonable level of profitability for an asset-light services business. The near-zero debt/equity ratio of 0.01x combined with a current ratio of 2.59x reflects a fortress balance sheet with ample liquidity to cover short-term obligations...
Risk Assessment
- EARNINGS QUALITY — Earnings declined 2.5% YoY even as revenue grew 14.2%, suggesting margin compression that reduces the quality of reported profits.
- VALUATION DIVERGENCE — Only one DCF estimate was available (Python est. of $255.07), so no divergence can be calculated, but the model is highly sensitive to terminal growth assumptions.
- TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed.
- DEBT / LIQUIDITY — No material debt risk exists (D/E of 0.01x), but the current ratio of 2.59x, while strong, provides limited additional actionable flags on this front....
Gross margin of 29.1% and net margin of 7.0% indicate a reasonable level of profitability for an asset-light services business. The near-zero debt/equity ratio of 0.01x combined with a current ratio of 2.59x reflects a fortress balance sheet with ample liquidity to cover short-term obligations. Free cash flow of $612.69M is substantial in absolute terms, translating to a FCF yield of 13.6%, which suggests strong cash conversion and a high return on capital employed. The net margin of 7.0% — while not exceptional — underpins a healthy, cash-generative business model that provides significant capacity for reinvestment, acquisitions, or capital returns to shareholders.
- EARNINGS QUALITY — Earnings declined 2.5% YoY even as revenue grew 14.2%, suggesting margin compression that reduces the quality of reported profits. - VALUATION DIVERGENCE — Only one DCF estimate was available (Python est. of $255.07), so no divergence can be calculated, but the model is highly sensitive to terminal growth assumptions. - TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed. - DEBT / LIQUIDITY — No material debt risk exists (D/E of 0.01x), but the current ratio of 2.59x, while strong, provides limited additional actionable flags on this front.
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