📊 EPAM Key Takeaways
Is EPAM Systems, Inc. (EPAM) a Good Investment?
EPAM demonstrates solid revenue growth of 15.4% YoY, but this masks severe operational deterioration: negative operating cash flow of -36.4M and negative free cash flow of -54.2M indicate the business is burning cash despite generating net income. Declining diluted EPS of -14.3% YoY coupled with weak margins (5.9% net, 8.3% operating) and abysmal returns (2.4% ROE, 1.8% ROA) suggest fundamental profitability problems that outweigh top-line growth.
EPAM shows strong fundamental quality with double-digit revenue growth, solid operating profitability, and robust free cash flow generation. Its balance sheet is exceptionally strong, with high liquidity, minimal debt, and substantial cash, which supports resilience and flexibility. The main constraint is that earnings quality is mixed, as net income was flat and diluted EPS declined despite strong top-line growth.
EPAM Systems, Inc. Key Strengths (EPAM)
- Revenue growth of 15.4% YoY demonstrates continued market demand for services
- Strong balance sheet with 2.67x current ratio, 0.05x debt/equity, and 1.0B cash reserves provide financial flexibility
- Low leverage and minimal long-term debt (165M) reduce financial distress risk
- Revenue growth of 15.4% YoY indicates healthy demand and business momentum
- Excellent financial health with $1.30B in cash, very low long-term debt, and debt/equity of 0.01x
- Strong cash generation with $612.69M in free cash flow and an 11.2% FCF margin
EPAM Stock Risks: EPAM Systems, Inc. Investment Risks
- Negative operating cash flow (-36.4M) and free cash flow (-54.2M) indicate the business is burning cash despite positive net income, suggesting quality of earnings concerns
- Diluted EPS declined 14.3% YoY despite revenue growth, indicating severe margin compression and operational inefficiency
- Profitability margins are exceptionally weak (5.9% net margin, 8.3% operating margin) with ROE of 2.4% and ROA of 1.8%, suggesting the business generates minimal returns on its asset base
- Net income was flat year over year, suggesting margin pressure or rising costs despite strong revenue growth
- Diluted EPS fell 14.3% YoY, indicating weaker per-share earnings performance
- Operating margin of 9.5% is solid but not exceptionally high for a services business and could face pressure if labor costs rise
Key Metrics to Watch
- Operating cash flow and free cash flow trajectory (critical to determine if cash burn is improving or worsening)
- Operating margin expansion and return to positive net cash generation
- EPS recovery and dilution trends; cost structure rationalization efforts
- Operating margin trend
- Diluted EPS growth
EPAM Systems, Inc. (EPAM) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Strong liquidity with a 2.67x current ratio provides a solid financial cushion.
EPAM Profit Margin, ROE & Profitability Analysis
EPAM vs Technology Sector: How EPAM Systems, Inc. Compares
How EPAM Systems, Inc. compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is EPAM Systems, Inc. Stock Overvalued? EPAM Valuation Analysis 2026
Based on fundamental analysis, EPAM Systems, Inc. has mixed fundamental signals relative to the Technology sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
EPAM Systems, Inc. Balance Sheet: EPAM Debt, Cash & Liquidity
EPAM Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: EPAM Systems, Inc.'s revenue has grown significantly by 45% over the 5-year period, indicating strong business expansion. The most recent EPS of $7.06 reflects profitable operations.
EPAM Revenue Growth, EPS Growth & YoY Performance
EPAM Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $1.3B | $73.5M | $1.28 |
| Q3 2025 | $1.2B | $73.5M | $1.91 |
| Q2 2025 | $1.1B | $73.5M | $1.56 |
| Q1 2025 | $1.2B | $73.5M | $1.28 |
| Q3 2024 | $1.2B | $97.2M | $1.65 |
| Q2 2024 | $1.1B | $98.6M | $1.70 |
| Q1 2024 | $1.2B | $102.3M | $1.73 |
| Q3 2023 | $1.2B | $18.6M | $1.65 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
EPAM Systems, Inc. Dividends, Buybacks & Capital Allocation
EPAM SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for EPAM Systems, Inc. (CIK: 0001352010)
📋 Recent SEC Filings
❓ Frequently Asked Questions about EPAM
What is the AI rating for EPAM?
EPAM Systems, Inc. (EPAM) has a Combined AI Grade of B from Claude (C) and ChatGPT (A) with 76% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are EPAM's key strengths?
Claude: Revenue growth of 15.4% YoY demonstrates continued market demand for services. Strong balance sheet with 2.67x current ratio, 0.05x debt/equity, and 1.0B cash reserves provide financial flexibility. ChatGPT: Revenue growth of 15.4% YoY indicates healthy demand and business momentum. Excellent financial health with $1.30B in cash, very low long-term debt, and debt/equity of 0.01x.
What are the risks of investing in EPAM?
Claude: Negative operating cash flow (-36.4M) and free cash flow (-54.2M) indicate the business is burning cash despite positive net income, suggesting quality of earnings concerns. Diluted EPS declined 14.3% YoY despite revenue growth, indicating severe margin compression and operational inefficiency. ChatGPT: Net income was flat year over year, suggesting margin pressure or rising costs despite strong revenue growth. Diluted EPS fell 14.3% YoY, indicating weaker per-share earnings performance.
What is EPAM's revenue and growth?
EPAM Systems, Inc. reported revenue of $1.4B.
Does EPAM pay dividends?
EPAM Systems, Inc. does not currently pay dividends.
Where can I find EPAM SEC filings?
Official SEC filings for EPAM Systems, Inc. (CIK: 0001352010) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is EPAM's EPS?
EPAM Systems, Inc. has a diluted EPS of $1.52.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is EPAM's fundamental grade?
Based on our AI fundamental analysis in June 2026, EPAM Systems, Inc. has a B grade with 76% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is EPAM stock overvalued or undervalued?
Valuation metrics for EPAM: ROE of 2.4% (sector avg: 22%), net margin of 5.9% (sector avg: 18%). Compare these metrics with sector averages to assess valuation.
What is EPAM's AI grade for 2026?
Our dual AI analysis gives EPAM Systems, Inc. a combined B grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is EPAM's free cash flow?
EPAM Systems, Inc.'s operating cash flow is $-36.4M, with capital expenditures of $17.9M. FCF margin is -3.9%.
How does EPAM compare to other Technology stocks?
Vs Technology sector averages: Net margin 5.9% (avg: 18%), ROE 2.4% (avg: 22%), current ratio 2.67 (avg: 2.5).