EPAM Systems Stock Plummets 18.4% Despite Earnings Beat
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Should l Buy EPAM?
Source: Fool
- Earnings Surprise: EPAM Systems reported Q4 earnings of $3.26 per share, exceeding analyst expectations of $3.16, with sales slightly above $1.4 billion; however, the stock plummeted 18.4%, indicating market concerns about future profitability.
- GAAP vs Non-GAAP Discrepancy: While EPAM's non-GAAP profits rose 15% year-over-year, the actual GAAP earnings were only $1.98 per share, 39% lower than non-GAAP figures, raising investor skepticism about the quality of earnings.
- Annual Performance Review: For the full year, EPAM achieved a 15% sales growth to $5.5 billion, but non-GAAP profits grew only 6%, and GAAP profits fell 14%, reflecting pressure on profitability that could affect investor confidence moving forward.
- Future Outlook: EPAM anticipates earnings will reach $8.10 per share by 2026, a 20% increase, despite projected sales growth slowing to 6%, with a current P/E ratio of 16.8x potentially presenting a buying opportunity for investors.
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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.
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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.
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- Investor Sentiment: Increased worries among investors have contributed to the halt in the market's upward momentum.
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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.
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US Stock Market Under Pressure Amid AI Outlook Concerns
- Market Weakness: The S&P 500 index fell by 0.26%, the Dow Jones Industrial Average by 0.28%, and the Nasdaq 100 by 0.34%, reflecting market concerns over the outlook for artificial intelligence, particularly with poor performances from chipmakers and AI infrastructure stocks.
- Mixed Economic Data: Initial jobless claims in the US fell by 23,000 to 206,000, marking a 5-week low and indicating a strong labor market; however, the December trade deficit widened to $70.3 billion, exceeding expectations and suggesting challenges in economic recovery.
- Earnings Season Nearing End: Over 75% of S&P 500 companies have reported earnings, with 75% exceeding expectations, and Q4 earnings growth is projected at 8.4%, marking the tenth consecutive quarter of year-over-year growth, demonstrating resilience in corporate earnings.
- Geopolitical Risks Intensify: WTI crude oil prices rose over 2% to a three-week high due to military buildup in the Middle East, potentially increasing inflationary pressures, which could affect market sentiment and investor confidence.
See More
US Stocks Decline Amid AI Outlook Concerns
- Market Decline: The S&P 500 Index fell by 0.44%, the Dow Jones by 0.57%, and the Nasdaq 100 by 0.66%, reflecting market concerns over the outlook for artificial intelligence, particularly impacting chipmakers and AI infrastructure stocks.
- Mixed Economic Data: Weekly initial jobless claims dropped to 206,000, a five-week low, indicating a strong labor market; however, the December trade deficit widened to $70.3 billion, exceeding expectations, suggesting economic pressures that could affect market confidence.
- Earnings Season Nearing End: Over 75% of S&P 500 companies have reported earnings, with 75% exceeding expectations, and Q4 earnings growth projected at 8.4%, providing some support for the market, although overall sentiment remains cautious.
- Geopolitical Risks Intensify: WTI crude oil prices rose over 1% to a three-week high due to U.S. military buildup in the Middle East, heightening inflation concerns and potentially increasing expectations for Fed rate hikes.
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
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
US Stock Market Under Pressure Amid AI Outlook Concerns
- Market Weakness: The S&P 500 index fell by 0.26%, the Dow Jones Industrial Average by 0.28%, and the Nasdaq 100 by 0.34%, reflecting market concerns over the outlook for artificial intelligence, particularly with poor performances from chipmakers and AI infrastructure stocks.
- Mixed Economic Data: Initial jobless claims in the US fell by 23,000 to 206,000, marking a 5-week low and indicating a strong labor market; however, the December trade deficit widened to $70.3 billion, exceeding expectations and suggesting challenges in economic recovery.
- Earnings Season Nearing End: Over 75% of S&P 500 companies have reported earnings, with 75% exceeding expectations, and Q4 earnings growth is projected at 8.4%, marking the tenth consecutive quarter of year-over-year growth, demonstrating resilience in corporate earnings.
- Geopolitical Risks Intensify: WTI crude oil prices rose over 2% to a three-week high due to military buildup in the Middle East, potentially increasing inflationary pressures, which could affect market sentiment and investor confidence.
See More
US Stocks Decline Amid AI Outlook Concerns
- Market Decline: The S&P 500 Index fell by 0.44%, the Dow Jones by 0.57%, and the Nasdaq 100 by 0.66%, reflecting market concerns over the outlook for artificial intelligence, particularly impacting chipmakers and AI infrastructure stocks.
- Mixed Economic Data: Weekly initial jobless claims dropped to 206,000, a five-week low, indicating a strong labor market; however, the December trade deficit widened to $70.3 billion, exceeding expectations, suggesting economic pressures that could affect market confidence.
- Earnings Season Nearing End: Over 75% of S&P 500 companies have reported earnings, with 75% exceeding expectations, and Q4 earnings growth projected at 8.4%, providing some support for the market, although overall sentiment remains cautious.
- Geopolitical Risks Intensify: WTI crude oil prices rose over 1% to a three-week high due to U.S. military buildup in the Middle East, heightening inflation concerns and potentially increasing expectations for Fed rate hikes.
See More
