EPAM Systems Inc (EPAM): A Deep Dive into Financial Metrics and Competitive Strengths
EPAM Systems Inc (NYSE:EPAM) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at 266.21, EPAM Systems Inc has witnessed a surge of 1.14% over a period, marked against a three-month change of 26.52%. A thorough analysis, underlined by the GuruFocus Score Rating, suggests that EPAM Systems Inc is well-positioned for substantial growth in the near future.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
EPAM Systems Inc has been assigned the following ranks:
1. Financial strength rank: 9/10
2. Profitability rank: 10/10
3. Growth rank: 10/10
4. GF Value rank: 4/10
5. Momentum rank: 4/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With high ranks in financial strength, profitability, and growth, and moderate ranks in GF value and momentum, GuruFocus assigned EPAM Systems Inc the GF Score of 92 out of 100, which signals the highest outperformance potential.
Introduction to EPAM Systems Inc
EPAM Systems Inc provides software product development and digital platform engineering services to clients located around the world. The company services include Software Product Development, Custom Application Development, Application Testing, Enterprise Application Platforms, Application Maintenance, and Support and Infrastructure Management. The company focuses on innovative and scalable software solutions. The company uses industry standard and custom developed technology, tools, and platforms to deliver results to handle business challenges. The company primarily offers its solutions in the following industries: financial services, travel and consumer, software and hi-tech, life sciences and healthcare. The majority of revenue is generated from North American clients.
With a market cap of $15.43 billion and sales of $4.84 billion, EPAM Systems Inc has an operating margin of 12.72%. This is the income breakdown of EPAM Systems Inc:
Financial Strength Analysis
According to the Financial Strength rating, EPAM Systems Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. With an Altman Z-Score of 14.24, EPAM Systems Inc exhibits a strong defense against financial distress, highlighting its robust financial stability. With a favorable Debt-to-Revenue ratio of 0.04, EPAM Systems Inc's strategic handling of debt solidifies its financial health.
Profitability Rank Analysis
The Profitability Rank shows EPAM Systems Inc's impressive standing among its peers in generating profit. EPAM Systems Inc's strong Predictability Rank of 4.5 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Analysis
Ranked highly in Growth, EPAM Systems Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 27%, which outperforms better than 82.47% of 2396 companies in the Software industry. Moreover, EPAM Systems Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 19.8, and the rate over the past five years is 28.3. This trend accentuates the company's continued capability to drive growth.
Conclusion
Given the company's strong financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights the firm's unparalleled position for potential outperformance. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
This article first appeared on GuruFocus.
