EPAM Systems Shows Signs of Recovery After Strong Q3 Earnings
Company Overview and Performance Comparison: Newtown, Pennsylvania-based EPAM Systems, Inc. (EPAM) stands out as a key global player in digital engineering, cloud, and AI transformation services. It also offers consulting to various international businesses and emerging startups. With a market cap of $13.9 billion, EPAM operates across the Americas, Indo-Pacific, and EMEA regions.
Despite its strong positioning, EPAM has faced challenges this past year. EPAM stock has dropped over 17.3% year-to-date (YTD) and 3.8% over the last 52 weeks, in stark contrast to the S&P 500 Index’s impressive YTD growth of 25.8% and a 52-week increase of 31.8%.
Furthermore, EPAM has also lagged behind the Fidelity MSCI Information Technology Index ETF’s (FTEC) 2024 gains of 27.7% and 34.2% in the preceding year.
On November 7, EPAM saw its stock climb by 14.9% following the release of its Q3 earnings report. The company reported $1.2 billion in revenue, reflecting a 1.3% year-over-year increase, which exceeded Wall Street’s expectations by 1.5%. Additionally, adjusted earnings per share (EPS) grew by 14.3% year-over-year to $3.12, successfully surpassing analyst forecasts.
EPAM’s recent acquisition of NEORIS also highlights its investment in expanding its global delivery capabilities to better serve clients. This strong quarter performance led the company to raise its full-year revenue and earnings guidance, boosting confidence among investors.
Looking ahead to the current fiscal year, which ends in December, analysts predict a slight decline in EPAM’s profits to $8.58 per share, although the company has a strong history of exceeding earnings expectations. It has met or exceeded bottom-line estimates in each of the past four quarters.
EPAM currently holds a consensus “Moderate Buy” rating. Out of the 20 analysts monitoring the stock, ten recommend a “Strong Buy,” one suggests a “Moderate Buy,” eight propose a “Hold,” and one recommends a “Moderate Sell.”
This assessment is slightly more optimistic than a month ago, when nine analysts had opted for “Strong Buy” ratings.
On November 11, Scotiabank analyst Divya Goyal upgraded EPAM to “Outperform,” setting a price target of $275, which indicates an 11.9% potential increase from its current levels. Meanwhile, the average price target of $250.89 offers a modest 2.1% premium over current prices, while the Street-high target of $300 indicates a potential upside of 22.1%.
On the date of publication, Aditya Sarawgi did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please refer to the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
