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EPAM Systems, Inc. (NYSE:EPAM): What Does The Future Look Like?

Simply Wall St

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After EPAM Systems, Inc.'s (NYSE:EPAM) earnings announcement in March 2019, the consensus outlook from analysts appear somewhat bearish, with earnings expected to grow by 20% in the upcoming year against the higher past 5-year average growth rate of 24%. Presently, with latest-twelve-month earnings at US$240m, we should see this growing to US$287m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those interested in more of an analysis of the company, you can research its fundamentals here.

See our latest analysis for EPAM Systems

What can we expect from EPAM Systems in the longer term?

The view from 13 analysts over the next three years is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.

NYSE:EPAM Past and Future Earnings, June 14th 2019

This results in an annual growth rate of 18% based on the most recent earnings level of US$240m to the final forecast of US$428m by 2022. This leads to an EPS of $7.36 in the final year of projections relative to the current EPS of $4.48. Margins are currently sitting at 13%, approximately the same as previous years. With analysts forecasting revenue growth of 0.77775 and EPAM's net income growth expected to roughly track that, this company may add value for shareholders over time.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For EPAM Systems, I've compiled three relevant aspects you should further examine:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is EPAM Systems worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether EPAM Systems is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of EPAM Systems? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.