EPAM Systems Inc

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EPAM : NYSE : Technology
$84.42 -0.21 | -0.25%
Today's Range: 84.2 - 86.25
Avg. Daily Volume: 367100.0
06/26/17 - 4:02 PM ET

Financial Analysis


EPAM SYSTEMS INC's gross profit margin for the first quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. EPAM SYSTEMS INC is extremely liquid. Currently, the Quick Ratio is 5.54 which clearly shows the ability to cover any short-term cash needs. EPAM managed to increase the liquidity from the same period a year ago, despite already having very strong liquidity to begin with. This would indicate improved cash flow.

At the same time, stockholders' equity ("net worth") has greatly increased by 26.98% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.

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Income Statement Q1 FY17 Q1 FY16
Net Sales ($mil)324.65264.48
EBITDA ($mil)39.0435.81
EBIT ($mil)32.3630.7
Net Income ($mil)23.6423.9


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)399.09244.88
Total Assets ($mil)986.99807.87
Total Debt ($mil)25.0440.12
Equity ($mil)835.1657.62


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin36.0136.71
EBITDA Margin12.0213.53
Operating Margin9.9711.61
Sales Turnover1.241.21
Return on Assets10.0311.59
Return on Equity11.8514.23
Debt Q1 FY17 Q1 FY16
Current Ratio5.765.14
Debt/Capital0.030.06
Interest Expense0.00.0
Interest Coverage0.00.0


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)51.6650.54
Div / share0.00.0
EPS0.440.45
Book value / share16.1613.01
Institutional Own % n/a n/a
Avg Daily Volume365937.0414074.0

Valuation


BUY. EPAM SYSTEMS INC's P/E ratio indicates a significant premium compared to an average of 31.75 for the IT Services industry and a significant premium compared to the S&P 500 average of 25.75. To use another comparison, its price-to-book ratio of 5.12 indicates a significant premium versus the S&P 500 average of 3.09 and a significant discount versus the industry average of 9.85. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
EPAM 44.76 Peers 31.75   EPAM 22.91 Peers 21.57

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

EPAM is trading at a significant premium to its peers.

 

Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

EPAM is trading at a valuation on par to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
EPAM 20.15 Peers 22.07   EPAM 0.55 Peers 1.73

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

EPAM is trading at a premium to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

EPAM trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
EPAM 5.12 Peers 9.85   EPAM 3.93 Peers -1.13

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

EPAM is trading at a significant discount to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

EPAM is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
EPAM 3.51 Peers 5.67   EPAM 24.70 Peers 11.40

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

EPAM is trading at a significant discount to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

EPAM has a sales growth rate that significantly exceeds its peers.

 

 

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