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Newtown, Pennsylvania-based EPAM Systems, Inc. (EPAM) is a leading global provider of digital engineering, cloud and AI-enabled transformation services. It also provides business and experience consulting to numerous global enterprises and ambitious startups. With a market cap of $13.9 billion, EPAM’s operations span the Americas, Indo-Pacific, and the EMEA region.
The IT services major has underperformed the broader market over the past year. EPAM stock prices have plunged over 17.3% on a YTD basis and 3.8% over the past 52 weeks, lagging behind the S&P 500 Index’s ($SPX) surge of 25.8% on a YTD basis and 31.8% over the past 52 weeks.
In addition, EPAM has underperformed the Fidelity MSCI Information Technology Index ETF’s (FTEC) 27.7% gains in 2024 and 34.2% returns over the past year.
EPAM stock soared 14.9% after the release of its impressive Q3 earnings on Nov. 7. The company is observing an ongoing improvement across its business and reported a 1.3% year-over-year growth in revenues, reaching $1.2 billion, which surpassed Wall Street’s topline expectations by a notable 1.5%. Moreover, the company has observed a robust improvement in profitability with its adjusted EPS surging 14.3% year-over-year to $3.12, beating analysts’ projections.
Additionally, EPAM’s recent acquisition of NEORIS demonstrates its strong commitment to diversifying its global delivery platform and readiness to enter new markets to best serve its enterprise clients. Furthermore, observing the robust performance during the quarter, EPAM raised its full-year revenues and earnings guidance, bolstering investor confidence.
For the current fiscal year, ending in December, analysts expect EPAM’s profits to decline marginally year-over-year to $8.58 per share. However, the company has a robust earnings surprise history. It has surpassed analysts’ bottom-line estimates in the past four quarters.
EPAM stock has a consensus “Moderate Buy” rating overall. Among the 20 analysts covering the stock, 10 recommend “Strong Buy,” one advises “Moderate Buy,” eight suggest “Hold,” and one advocates a “Moderate Sell” rating.
This configuration is slightly more bullish than when nine analysts recommended “Strong Buy” ratings a month ago.
On Nov. 11, Scotiabank analyst Divya Goyal upgraded EPAM to “Outperform” with a price target of $275, indicating an 11.9% upside potential from current price levels.
The mean price target of $250.89 represents a modest 2.1% premium to current price levels. The Street-high price target of $300 suggests a staggering 22.1% upside potential.
