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EPAM Systems (EPAM) to Post Q3 Earnings: What's in Store?

Zacks Equity Research

EPAM Systems EPAM is slated to release third-quarter 2019 results on Nov 7.

For the third quarter, the company expects revenues at minimum $579 million. The Zacks Consensus Estimate is currently pegged at $579.9 million, indicating 23.9% growth from the year-ago reported figure.

Non-GAAP earnings per share are anticipated at $1.32. The consensus mark for earnings of $1.34 suggests 14.53% rise from the year-ago reported quarter.

The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 5.76%.

In second-quarter 2019, non-GAAP earnings per share rose 26.7% year over year to $1.28 and also beat the Zacks Consensus Estimate of $1.23.

Additionally, revenues in the reported quarter came in at $551.6 million, marking a year-over-year rise of 23.8% and also topping the Zacks Consensus Estimate of $549 million. On constant currency (cc) basis, revenues were up 25.1%.

EPAM Systems, Inc. Price and EPS Surprise

EPAM Systems, Inc. Price and EPS Surprise

EPAM Systems, Inc. price-eps-surprise | EPAM Systems, Inc. Quote

Let’s see how things are shaping up for the upcoming announcement.

Factors at Play

EPAM System’s third-quarter results are likely to have been driven by broad-based demand for its digital solutions. Notably, the company is witnessing growth across all industry verticals and geographies. Digital transformation along with focus on customer engagement and product development is likely to have been a key catalyst.

Normalized growth in financial services in the second quarter, after witnessing a weak first quarter, makes us optimistic. Growing demand for asset management and payment processing offerings is expected to have been a tailwind. Albeit insurance is a small segment generating modest revenues, it is increasingly benefiting the company.

Furthermore, rising demand for consulting services in the healthcare vertical is a positive.

However, slowdown within certain consumer clients in Europe and North America might have persisted as a key challenge to the travel & consumer segment.

Additionally, adverse foreign currency fluctuations and macroeconomic perils are likely to have posed a key threat to the stock.

What Our Model Says

The proven Zacks model does not conclusively predict an earnings beat for EPAM Systems this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

EPAM Systems’ Zacks Rank #2 and an Earnings ESP of 0.00% make surprise prediction difficult.

Stocks to Consider

Here are some stocks worth considering as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Activision Blizzard, Inc ATVI has an Earnings ESP of +24.30% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Eyenovia, Inc. EYEN has an Earnings ESP of +10.51% and a Zacks Rank of 2.

iHeartMedia, Inc. IHRT has an Earnings ESP of +3.17% and is Zacks #2 Ranked.

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EPAM Systems, Inc. (EPAM) : Free Stock Analysis Report
 
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