EPAM Systems Faces Rough Waters Ahead; Stock Tanks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 09 2024
0mins
Source: Benzinga
EPAM Systems, Inc. FY24 Q1 Results:
- Sales declined 3.8% Y/Y to $1.165 billion, beating analyst estimates.
- Adjusted income from operations was $173.6 million, down 2.6% Y/Y.
- Adjusted EPS of $2.46, down 0.4% Y/Y, exceeded consensus expectations.
- Operating cash flow in the quarter was $129.9 million.
- CEO mentioned adaptability to challenging demand environment.
Outlook for EPAM Systems, Inc.:
- Second-quarter revenue expected at $1.135 billion-$1.145 billion, below consensus.
- Adjusted EPS outlook for Q2 is $2.21-$2.29 compared to an estimated $2.44.
- FY24 revenue outlook revised to $4.575 billion-$4.675 billion.
- Adjusted EPS guidance for FY24 adjusted to $10.00-$10.30.
- Stock exposure available through Vesper US Large Cap Short-Term Reversal Strategy ETF UTRN.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy EPAM?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on EPAM
Wall Street analysts forecast EPAM stock price to rise
13 Analyst Rating
9 Buy
4 Hold
0 Sell
Moderate Buy
Current: 99.690
Low
170.00
Averages
214.70
High
246.00
Current: 99.690
Low
170.00
Averages
214.70
High
246.00
About EPAM
EPAM Systems, Inc. is a global provider of digital engineering, cloud and artificial intelligence-enabled transformation services, and a business and experience consulting partner for global enterprises and start-ups. The Company leverages AI to deliver transformative solutions that accelerate its clients' digital innovation. Through platforms like EPAM AI/RUN and initiatives like DIALX Lab, it integrates advanced AI technologies into tailored business strategies. Its services include strategy; engineering, cloud, data & analytics; artificial intelligence; cybersecurity, and CX+. Its clients operate in five main industry verticals (financial services; consumer goods, retail and travel; software and hi-tech; business information and media, and life sciences and healthcare) as well as a number of emerging verticals. Its strategy services include optimizing for growth, talent enablement, and mergers and acquisitions. Its engineering services include open source and quality engineering.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
FedEx Freight to Replace EPAM in S&P 500
- Index Component Changes: FedEx Freight Holding will replace EPAM Systems in the S&P 500 effective June 2, reflecting positive market expectations regarding FedEx's business restructuring, which may enhance its stock performance.
- Small Cap Adjustments: EPAM Systems will replace Shutterstock in the S&P SmallCap 600, indicating its potential in the small-cap market and likely attracting more investor attention.
- Acquisition Dynamics: Shutterstock is anticipated to be acquired soon, which could influence its shareholders' investment strategies and create ripple effects in the market.
- Market Restructuring Impact: Dave will replace American Woodmark in the S&P SmallCap 600 on June 1, signaling market confidence in its future growth, while MasterBrand's acquisition will further consolidate the small-cap market.
See More
Changes to S&P 500 and SmallCap 600 Indices Announced
- S&P 500 Changes: FedEx Freight Holding will replace EPAM Systems in the S&P 500 effective June 2, following a spin-off transaction expected to complete on June 1, ensuring FedEx remains in the index and solidifying its market position.
- SmallCap 600 Adjustments: EPAM Systems will take the place of Shutterstock in the S&P SmallCap 600, reflecting the dynamic shifts in the small-cap market and potentially impacting investor confidence in the index.
- Acquisition Activity: Shutterstock is anticipated to be acquired, a transaction that could affect its market performance, prompting investors to monitor the potential impact on its stock price.
- Dave Inc. Listing: Dave Inc. will replace American Woodmark Corp. in the S&P SmallCap 600 prior to June 1, indicating the vibrancy of the small-cap market and its appeal to emerging companies, potentially offering new investment opportunities for investors.
See More
S&P 500 and SmallCap 600 Index Adjustments Announced
- S&P SmallCap 600 Addition: On June 1, 2026, Dave (DAVE) will be added to the S&P SmallCap 600 Index, enhancing the index's representation in the financial sector and likely attracting more investor interest.
- S&P SmallCap 600 Deletion: On the same day, American Woodmark (AMWD) will be removed, indicating that the company's performance in the industrial sector has not met index requirements, which may pressure its stock price.
- S&P 500 Addition: FedEx Freight (FDXF) will join the S&P 500 Index on June 1, 2026, marking its growth potential in the industrial sector and expected to boost its market recognition and investment appeal.
- S&P 500 Deletion: EPAM Systems (EPAM) will be removed on June 2, 2026, reflecting its poor market performance in the information technology sector, which may impact shareholder confidence and future investment decisions.
See More
Owls Nest Partners Fully Exits EPAM Systems
- Position Change: Owls Nest Partners sold 230,246 shares of EPAM Systems last quarter, with an estimated trade value of $39.37 million, indicating a diminished confidence in the stock's future performance.
- Value Decline: The quarter-end position value decreased by $47.17 million, reflecting both trading activities and price changes, suggesting a cautious market outlook for EPAM.
- Performance Recovery: Despite EPAM's first-quarter revenue rising 7.6% year-over-year to $1.4 billion and GAAP EPS increasing nearly 19%, Owls Nest's complete exit signals uncertainty about future growth prospects.
- Investor Sentiment: Management remains optimistic, projecting full-year revenue growth of 4% to 6.5%, yet investors must assess whether AI-driven demand can translate into sustained organic growth.
See More
Owls Nest Partners Fully Exits EPAM Systems Stake
- Exit Transaction: On May 14, 2026, Owls Nest Partners IA disclosed to the SEC that it sold all 230,246 shares of EPAM Systems, with an estimated transaction value of $39.37 million, reflecting a pessimistic outlook on the company's future performance.
- Stock Price Decline: As of May 13, 2026, EPAM Systems shares were priced at $102.69, down 43% over the past year, significantly underperforming the S&P 500, which rose about 28% during the same period, indicating market concerns about its prospects.
- Financial Performance: Despite EPAM achieving a 7.6% revenue increase in Q1 to $1.4 billion and a nearly 19% rise in GAAP EPS to $1.52, Owls Nest's complete exit suggests a lack of confidence in a short-term recovery.
- Future Outlook: EPAM's management remains optimistic, projecting full-year revenue growth of 4% to 6.5% and non-GAAP EPS between $12.98 and $13.28, but investors will need to see if AI-driven demand can translate into sustained organic growth.
See More
U.S. Producer Price Index Surges, Impacting Stocks
- Producer Price Surge: The U.S. Bureau of Labor Statistics reported a 1.4% month-over-month increase in the Producer Price Index (PPI) for April, marking the largest monthly rise since March 2022, with a year-over-year increase of 6%, indicating persistent inflationary pressures that may lead companies to pass costs onto consumers, thereby increasing market uncertainty.
- Market Reaction: Following this news, several stocks fell sharply, including CRA down 3.5%, SAIC down 4.5%, OSI Systems down 4.2%, EPAM down 3.9%, and Kyndryl down 4.8%, reflecting the market's sensitive response to inflation data and its implications for future earnings.
- Kyndryl's Volatility: Kyndryl's shares have experienced over 20 moves greater than 5% in the past year, and while today's drop is significant, it suggests that the market perceives the news as impactful but not fundamentally altering its view of the business, indicating investor confidence in long-term contracts.
- Investor Interest in IT Sector: As the threat of prolonged Middle East conflict recedes, enterprise clients are more likely to commit to multi-year digital transformation projects, and with moderating inflation expectations alongside falling oil prices, IT firms can better forecast wage and overhead expenses, driving renewed investor interest in the sector as a reliable growth play.
See More
FedEx Freight to Replace EPAM in S&P 500
- Index Component Changes: FedEx Freight Holding will replace EPAM Systems in the S&P 500 effective June 2, reflecting positive market expectations regarding FedEx's business restructuring, which may enhance its stock performance.
- Small Cap Adjustments: EPAM Systems will replace Shutterstock in the S&P SmallCap 600, indicating its potential in the small-cap market and likely attracting more investor attention.
- Acquisition Dynamics: Shutterstock is anticipated to be acquired soon, which could influence its shareholders' investment strategies and create ripple effects in the market.
- Market Restructuring Impact: Dave will replace American Woodmark in the S&P SmallCap 600 on June 1, signaling market confidence in its future growth, while MasterBrand's acquisition will further consolidate the small-cap market.
See More
Changes to S&P 500 and SmallCap 600 Indices Announced
- S&P 500 Changes: FedEx Freight Holding will replace EPAM Systems in the S&P 500 effective June 2, following a spin-off transaction expected to complete on June 1, ensuring FedEx remains in the index and solidifying its market position.
- SmallCap 600 Adjustments: EPAM Systems will take the place of Shutterstock in the S&P SmallCap 600, reflecting the dynamic shifts in the small-cap market and potentially impacting investor confidence in the index.
- Acquisition Activity: Shutterstock is anticipated to be acquired, a transaction that could affect its market performance, prompting investors to monitor the potential impact on its stock price.
- Dave Inc. Listing: Dave Inc. will replace American Woodmark Corp. in the S&P SmallCap 600 prior to June 1, indicating the vibrancy of the small-cap market and its appeal to emerging companies, potentially offering new investment opportunities for investors.
See More
S&P 500 and SmallCap 600 Index Adjustments Announced
- S&P SmallCap 600 Addition: On June 1, 2026, Dave (DAVE) will be added to the S&P SmallCap 600 Index, enhancing the index's representation in the financial sector and likely attracting more investor interest.
- S&P SmallCap 600 Deletion: On the same day, American Woodmark (AMWD) will be removed, indicating that the company's performance in the industrial sector has not met index requirements, which may pressure its stock price.
- S&P 500 Addition: FedEx Freight (FDXF) will join the S&P 500 Index on June 1, 2026, marking its growth potential in the industrial sector and expected to boost its market recognition and investment appeal.
- S&P 500 Deletion: EPAM Systems (EPAM) will be removed on June 2, 2026, reflecting its poor market performance in the information technology sector, which may impact shareholder confidence and future investment decisions.
See More
Owls Nest Partners Fully Exits EPAM Systems
- Position Change: Owls Nest Partners sold 230,246 shares of EPAM Systems last quarter, with an estimated trade value of $39.37 million, indicating a diminished confidence in the stock's future performance.
- Value Decline: The quarter-end position value decreased by $47.17 million, reflecting both trading activities and price changes, suggesting a cautious market outlook for EPAM.
- Performance Recovery: Despite EPAM's first-quarter revenue rising 7.6% year-over-year to $1.4 billion and GAAP EPS increasing nearly 19%, Owls Nest's complete exit signals uncertainty about future growth prospects.
- Investor Sentiment: Management remains optimistic, projecting full-year revenue growth of 4% to 6.5%, yet investors must assess whether AI-driven demand can translate into sustained organic growth.
See More
Owls Nest Partners Fully Exits EPAM Systems Stake
- Exit Transaction: On May 14, 2026, Owls Nest Partners IA disclosed to the SEC that it sold all 230,246 shares of EPAM Systems, with an estimated transaction value of $39.37 million, reflecting a pessimistic outlook on the company's future performance.
- Stock Price Decline: As of May 13, 2026, EPAM Systems shares were priced at $102.69, down 43% over the past year, significantly underperforming the S&P 500, which rose about 28% during the same period, indicating market concerns about its prospects.
- Financial Performance: Despite EPAM achieving a 7.6% revenue increase in Q1 to $1.4 billion and a nearly 19% rise in GAAP EPS to $1.52, Owls Nest's complete exit suggests a lack of confidence in a short-term recovery.
- Future Outlook: EPAM's management remains optimistic, projecting full-year revenue growth of 4% to 6.5% and non-GAAP EPS between $12.98 and $13.28, but investors will need to see if AI-driven demand can translate into sustained organic growth.
See More
U.S. Producer Price Index Surges, Impacting Stocks
- Producer Price Surge: The U.S. Bureau of Labor Statistics reported a 1.4% month-over-month increase in the Producer Price Index (PPI) for April, marking the largest monthly rise since March 2022, with a year-over-year increase of 6%, indicating persistent inflationary pressures that may lead companies to pass costs onto consumers, thereby increasing market uncertainty.
- Market Reaction: Following this news, several stocks fell sharply, including CRA down 3.5%, SAIC down 4.5%, OSI Systems down 4.2%, EPAM down 3.9%, and Kyndryl down 4.8%, reflecting the market's sensitive response to inflation data and its implications for future earnings.
- Kyndryl's Volatility: Kyndryl's shares have experienced over 20 moves greater than 5% in the past year, and while today's drop is significant, it suggests that the market perceives the news as impactful but not fundamentally altering its view of the business, indicating investor confidence in long-term contracts.
- Investor Interest in IT Sector: As the threat of prolonged Middle East conflict recedes, enterprise clients are more likely to commit to multi-year digital transformation projects, and with moderating inflation expectations alongside falling oil prices, IT firms can better forecast wage and overhead expenses, driving renewed investor interest in the sector as a reliable growth play.
See More
