EPAM Systems Shares Drop 16.4% Amid 2026 Guidance Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy EPAM?
Source: Fool
- Strong Earnings Beat: EPAM Systems reported Q4 revenue of $1.41 billion, a 12.8% increase year-over-year, and adjusted EPS of $3.26, up 14.8%, surpassing expectations; however, the market's tepid response indicates underlying concerns about future growth prospects.
- Organic Growth Slowdown: Excluding acquisitions, EPAM's organic revenue growth was only 5.6% in Q4 and 4.9% for the full year, suggesting a lack of momentum in consulting services amid fears of AI disruption, which may undermine investor confidence.
- Weak 2026 Guidance: Management's forecast for 2026 revenue growth between 4.5% and 7.5%, with organic growth of 3% to 6%, signals a deceleration that has raised concerns about the company's future performance, particularly regarding potential pricing pressures from AI on human consultants.
- Acquisition Impact: EPAM acknowledged that its largest client at NOERIS, a recently acquired subsidiary, is scaling back business, which will detract about one percentage point from the 2026 growth rate, intensifying market worries about the new acquisition's impact on overall performance.
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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: 139.160
Low
170.00
Averages
214.70
High
246.00
Current: 139.160
Low
170.00
Averages
214.70
High
246.00
About EPAM
EPAM Systems, Inc. is a global provider of digital engineering, cloud and AI-enabled transformation services, and is a business and experience consulting partner for global enterprises and startups. The Company addresses its clients’ transformation challenges by fusing EPAM Continuum’s integrated strategy, experience and technology consulting. Through platforms like EPAM AI/RUN and initiatives like DIALX Lab, the Company integrates advanced AI technologies into tailored business strategies, driving industry impact and fostering continuous innovation. Its strategy services include optimizing for growth, talent enablement, mergers & acquisitions, project to product, generative AI advisory, and transformative research & insights. Its engineering services include platform & product development, agile ways of working, quality engineering, open source, and metaverse. It serves various industries, including financial services; telecom, media & entertainment, and life sciences & healthcare.
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.
EPAM Systems Q4 2025 Earnings Call Highlights
- Strong Revenue Growth: EPAM generated over $1.4 billion in Q4 2025, reflecting a 12.8% year-over-year increase that exceeded expectations, showcasing robust momentum in AI-native services with a projected revenue target exceeding $600 million in 2026.
- Impressive Industry Performance: Five out of six industry verticals reported year-over-year growth, with financial services up 19.8% and software & hi-tech up 18.1%, indicating sustained strong market demand across multiple sectors, enhancing the company's competitive edge.
- Optimistic Outlook: Management anticipates revenue growth in the range of 4.5% to 7.5% for 2026, with a positive foreign exchange impact of 1.5%, reflecting confidence in future market conditions despite revenue decline risks from NEORIS' largest client.
- Investment and Strategic Adjustments: EPAM is increasing investments in industry expertise, particularly in AI, with management emphasizing ongoing optimization of business development and delivery models to address elongated client decision cycles, ensuring long-term growth.
See More
EPAM Systems Shares Drop 16.4% Amid 2026 Guidance Concerns
- Strong Earnings Beat: EPAM Systems reported Q4 revenue of $1.41 billion, a 12.8% increase year-over-year, and adjusted EPS of $3.26, up 14.8%, surpassing expectations; however, the market's tepid response indicates underlying concerns about future growth prospects.
- Organic Growth Slowdown: Excluding acquisitions, EPAM's organic revenue growth was only 5.6% in Q4 and 4.9% for the full year, suggesting a lack of momentum in consulting services amid fears of AI disruption, which may undermine investor confidence.
- Weak 2026 Guidance: Management's forecast for 2026 revenue growth between 4.5% and 7.5%, with organic growth of 3% to 6%, signals a deceleration that has raised concerns about the company's future performance, particularly regarding potential pricing pressures from AI on human consultants.
- Acquisition Impact: EPAM acknowledged that its largest client at NOERIS, a recently acquired subsidiary, is scaling back business, which will detract about one percentage point from the 2026 growth rate, intensifying market worries about the new acquisition's impact on overall performance.
See More
EPAM Beats Expectations but Cautious Outlook Raises Concerns
- Earnings Beat: EPAM reported Q4 revenue of $1.41 billion, a 12.8% increase year-over-year, with adjusted EPS at $3.26, up 14.8%, both surpassing analyst expectations and demonstrating strong performance in the tech consulting sector.
- Cautious 2026 Guidance: Despite strong earnings, management's revenue growth forecast for 2026 is only between 4.5% and 7.5%, with organic growth projected at 3% to 6%, indicating a slowdown that may disappoint investors.
- AI Disruption Concerns: Management noted no pricing pressure from AI, but mentioned that the largest client of NOERIS is scaling back business, which will detract about one percentage point from EPAM's 2026 growth rate, raising further concerns about potential AI disruptions.
- Attractive Valuation: With a stock price of $139 at Thursday's close, EPAM trades at just under 11 times this year's adjusted EPS guidance, appearing cheap; however, ongoing concerns about AI's impact on human consultants may affect future investment decisions.
See More
Wall Street Analysts Adjust Ratings
- Analyst Rating Changes: Top Wall Street analysts have adjusted their ratings on several companies, indicating a shift in market sentiment that could influence investor decisions.
- Upgrades and Downgrades: While specific upgrades and downgrades are not detailed, the overall rating changes may lead to short-term volatility in the affected stocks, prompting investors to stay alert.
- Market Reaction Expectations: Analyst rating adjustments typically trigger immediate market reactions, and investors should consider the potential impact of these changes on stock prices to make more informed investment choices.
- Information Access Channels: Investors can visit the analyst ratings page to obtain a comprehensive view of rating changes, thereby enhancing their understanding of market trends and individual stock performance.
See More
Analysis and Outlook: Stay Alert on IEEPA
- Market Performance: The stock market's recent winning streak has come to an end due to rising market concerns.
- Investor Sentiment: Increased worries among investors have contributed to the halt in the market's upward momentum.
See More
US Stocks Close Lower Amid AI Outlook Concerns
- Market Weakness: The S&P 500 index fell by 0.28%, the Dow Jones Industrial Average decreased by 0.54%, and the Nasdaq 100 index dropped by 0.41%, indicating market concerns over the outlook for artificial intelligence, particularly affecting chipmakers and AI infrastructure stocks.
- Mixed Economic Data: Initial jobless claims in the US fell to 206,000, a 5-week low, indicating a strong labor market; however, the December trade deficit widened to $70.3 billion, exceeding expectations, reflecting uncertainties in economic recovery.
- Shifts in Fed Policy Expectations: Hawkish comments from Fed officials suggest a potential need for interest rate hikes to combat persistent inflation, leading to a more hawkish outlook for future rate paths, which further dampens market sentiment.
- Earnings Season Nearing Conclusion: With over three-quarters of S&P 500 companies reporting, 74% exceeded expectations, and Q4 earnings are projected to grow by 8.4%, demonstrating corporate resilience, yet the market remains cautious about future growth prospects.
See More
EPAM Systems Q4 2025 Earnings Call Highlights
- Strong Revenue Growth: EPAM generated over $1.4 billion in Q4 2025, reflecting a 12.8% year-over-year increase that exceeded expectations, showcasing robust momentum in AI-native services with a projected revenue target exceeding $600 million in 2026.
- Impressive Industry Performance: Five out of six industry verticals reported year-over-year growth, with financial services up 19.8% and software & hi-tech up 18.1%, indicating sustained strong market demand across multiple sectors, enhancing the company's competitive edge.
- Optimistic Outlook: Management anticipates revenue growth in the range of 4.5% to 7.5% for 2026, with a positive foreign exchange impact of 1.5%, reflecting confidence in future market conditions despite revenue decline risks from NEORIS' largest client.
- Investment and Strategic Adjustments: EPAM is increasing investments in industry expertise, particularly in AI, with management emphasizing ongoing optimization of business development and delivery models to address elongated client decision cycles, ensuring long-term growth.
See More
EPAM Systems Shares Drop 16.4% Amid 2026 Guidance Concerns
- Strong Earnings Beat: EPAM Systems reported Q4 revenue of $1.41 billion, a 12.8% increase year-over-year, and adjusted EPS of $3.26, up 14.8%, surpassing expectations; however, the market's tepid response indicates underlying concerns about future growth prospects.
- Organic Growth Slowdown: Excluding acquisitions, EPAM's organic revenue growth was only 5.6% in Q4 and 4.9% for the full year, suggesting a lack of momentum in consulting services amid fears of AI disruption, which may undermine investor confidence.
- Weak 2026 Guidance: Management's forecast for 2026 revenue growth between 4.5% and 7.5%, with organic growth of 3% to 6%, signals a deceleration that has raised concerns about the company's future performance, particularly regarding potential pricing pressures from AI on human consultants.
- Acquisition Impact: EPAM acknowledged that its largest client at NOERIS, a recently acquired subsidiary, is scaling back business, which will detract about one percentage point from the 2026 growth rate, intensifying market worries about the new acquisition's impact on overall performance.
See More
EPAM Beats Expectations but Cautious Outlook Raises Concerns
- Earnings Beat: EPAM reported Q4 revenue of $1.41 billion, a 12.8% increase year-over-year, with adjusted EPS at $3.26, up 14.8%, both surpassing analyst expectations and demonstrating strong performance in the tech consulting sector.
- Cautious 2026 Guidance: Despite strong earnings, management's revenue growth forecast for 2026 is only between 4.5% and 7.5%, with organic growth projected at 3% to 6%, indicating a slowdown that may disappoint investors.
- AI Disruption Concerns: Management noted no pricing pressure from AI, but mentioned that the largest client of NOERIS is scaling back business, which will detract about one percentage point from EPAM's 2026 growth rate, raising further concerns about potential AI disruptions.
- Attractive Valuation: With a stock price of $139 at Thursday's close, EPAM trades at just under 11 times this year's adjusted EPS guidance, appearing cheap; however, ongoing concerns about AI's impact on human consultants may affect future investment decisions.
See More
Wall Street Analysts Adjust Ratings
- Analyst Rating Changes: Top Wall Street analysts have adjusted their ratings on several companies, indicating a shift in market sentiment that could influence investor decisions.
- Upgrades and Downgrades: While specific upgrades and downgrades are not detailed, the overall rating changes may lead to short-term volatility in the affected stocks, prompting investors to stay alert.
- Market Reaction Expectations: Analyst rating adjustments typically trigger immediate market reactions, and investors should consider the potential impact of these changes on stock prices to make more informed investment choices.
- Information Access Channels: Investors can visit the analyst ratings page to obtain a comprehensive view of rating changes, thereby enhancing their understanding of market trends and individual stock performance.
See More
Analysis and Outlook: Stay Alert on IEEPA
- Market Performance: The stock market's recent winning streak has come to an end due to rising market concerns.
- Investor Sentiment: Increased worries among investors have contributed to the halt in the market's upward momentum.
See More
US Stocks Close Lower Amid AI Outlook Concerns
- Market Weakness: The S&P 500 index fell by 0.28%, the Dow Jones Industrial Average decreased by 0.54%, and the Nasdaq 100 index dropped by 0.41%, indicating market concerns over the outlook for artificial intelligence, particularly affecting chipmakers and AI infrastructure stocks.
- Mixed Economic Data: Initial jobless claims in the US fell to 206,000, a 5-week low, indicating a strong labor market; however, the December trade deficit widened to $70.3 billion, exceeding expectations, reflecting uncertainties in economic recovery.
- Shifts in Fed Policy Expectations: Hawkish comments from Fed officials suggest a potential need for interest rate hikes to combat persistent inflation, leading to a more hawkish outlook for future rate paths, which further dampens market sentiment.
- Earnings Season Nearing Conclusion: With over three-quarters of S&P 500 companies reporting, 74% exceeded expectations, and Q4 earnings are projected to grow by 8.4%, demonstrating corporate resilience, yet the market remains cautious about future growth prospects.
See More
