| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 79 | 18.6x | 17.3x | Top tier | |
Growth | 40 | 10.8% | 7.1% | Bottom tier | |
Quality | 62 | 11.0% | 4.5% | Around median | |
Safety | 93 | — | 2.6x | Top tier | |
Capital Return | 52 | 0.00% | 0.06% | Around median | |
Momentum | 52 | -24.9% | -1.6% | Around median | |
Sentiment | 71 | 14 | 3 | Top tier |
The floor: what the company is worth if growth stopped today
38% of today's price is what a buyer pays for growth that has not happened yet.
10-year US Treasury yield 4.96% as of 2026-10-22. Estimates computed from company data and analyst targets, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
EPAM Systems provides software engineering, digital transformation, data, cloud, cybersecurity, and legacy system modernization services to global enterprises. Most of its business relies on time-and-materials contracts that need to be renewed or resold regularly, rather than fixed annual subscription revenue. The company is redirecting its capabilities toward AI-native software engineering using its AI/Run, DIAL, and MF Lens tools, alongside mainframe and cloud platform modernization and agent-based managed services.
In Q2 FY2026, revenue reached $1.415 billion, growing 4.5% year over year and 3.4% organically in constant currency. GAAP operating income rose 20.4% to $152 million, and its margin improved from 9.3% to 10.8%, while adjusted operating income reached $233 million at a margin of 16.4% versus 15.0%. Gross margin also increased from 28.8% to 30.4%, and GAAP diluted earnings per share rose 26.3% to $1.97.
The Americas accounted for 57% of Q2 FY2026 revenue and grew by only 0.5%, compared with growth of 10.9% in Europe, the Middle East, and Africa, which represented 41%, and a decline of 0.3% in Asia-Pacific, which represented 2%. Financial Services was the fastest-growing segment at 11.5%, followed by Life Sciences and Healthcare at 8.0%, while Software and Hi-Tech declined 1.3% and Business Information and Media declined 2.1%. AI-native revenue exceeded $160 million, representing more than 11% of the company’s business and marking the sixth consecutive quarter of double-digit sequential growth.
The analyst consensus is Buy, with an average target of $119, a high of $167, and a low of $85; the average is approximately 46.5% below the 52-week range high of $222.53. The large gap between the $85 and $167 targets reflects disagreement over whether AI growth and margin improvement can offset weakness in North America and the reduced revenue guidance, while the provided data does not offer a valid earnings multiple for comparison.
Figures in the text are as of 2026-08-30; the live price is shown at the top of the page.
Revenue reached $1.415 billion, representing year-over-year growth of 4.5% and organic constant-currency growth of 3.4%. Financial Services led growth with an increase of 11.5%, followed by Life Sciences and Healthcare with an increase of 8.0%, while Europe, the Middle East, and Africa grew 10.9%. AI-native revenue contributed more than $160 million, but it did not prevent Software and Hi-Tech from declining 1.3% and Business Information and Media from declining 2.1%.
Management explained on August 6, 2026, that clients are redirecting spending from manual testing, user experience, and front-end engineering toward AI, modernization, and infrastructure. Traditional work is contracting faster than replacement work is scaling, particularly among Software as a Service clients in North America. The company therefore lowered its revenue growth outlook to 3.2%–4.2% and its organic constant-currency growth outlook to 2%–3% for FY2026.
AI-native revenue exceeded $160 million in Q2 FY2026 and now represents more than 11% of the company’s business. This was the sixth consecutive quarter of double-digit sequential growth, and management reaffirmed its $600 million target for FY2026. The capabilities used include AI/Run, DIAL, and MF Lens, in addition to data, cloud, and mainframe modernization.
Automated analysis for informational purposes only — not investment advice.
EPAM joined the OpenAI partner network as an advanced partner, with a first-year commitment to certify more than 5,000 consultants and train more than 10,000 professionals. The company has more than 5,700 Anthropic-certified engineers and is targeting more than 10,000 Claude-certified architects by the end of FY2026. It has also exceeded 2,000 certifications under the Gemini program, on its way to a target of 5,000 certifications by Q3 FY2026.
GAAP gross margin rose to 30.4% in Q2 FY2026, compared with 28.8% in Q2 FY2025. GAAP operating income margin expanded to 10.8% from 9.3%, while adjusted operating margin rose to 16.4% from 15.0%. The company expects an adjusted operating income margin of between 15.5% and 16.0% for FY2026, despite lowering its revenue outlook.
EPAM recorded negative operating cash flow of $2 million and negative free cash flow of $18 million in Q2 FY2026, with days sales outstanding rising to 82 days. The company lowered its FY2026 free cash flow conversion outlook to approximately 70%, compared with its typical range of 80%–90%. The large deals related to agent-based managed services and application maintenance have also not been signed, and management does not expect a meaningful revenue contribution from them before the first half of 2027.