Can You Imagine How Elated EPAM Systems' (NYSE:EPAM) Shareholders Feel About Its 543% Share Price Gain?
Buying shares in the best businesses can build meaningful wealth for you and your family. And highest quality companies can see their share prices grow by huge amounts. Just think about the savvy investors who held EPAM Systems, Inc. (NYSE:EPAM) shares for the last five years, while they gained 543%. This just goes to show the value creation that some businesses can achieve. Also pleasing for shareholders was the 18% gain in the last three months. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report.
Anyone who held for that rewarding ride would probably be keen to talk about it.
Check out our latest analysis for EPAM Systems
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
Over half a decade, EPAM Systems managed to grow its earnings per share at 27% a year. This EPS growth is slower than the share price growth of 45% per year, over the same period. So it's fair to assume the market has a higher opinion of the business than it did five years ago. That's not necessarily surprising considering the five-year track record of earnings growth. This optimism is visible in its fairly high P/E ratio of 73.43.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. This free interactive report on EPAM Systems' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
A Different Perspective
It's nice to see that EPAM Systems shareholders have received a total shareholder return of 106% over the last year. That's better than the annualised return of 45% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand EPAM Systems better, we need to consider many other factors. Even so, be aware that EPAM Systems is showing 1 warning sign in our investment analysis , you should know about...
Of course EPAM Systems may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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