Is EPAM Systems, Inc. (EPAM) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $156.82, EPAM Systems, Inc. (EPAM) sits inside a range too wide to call either way: our valuation lenses put the business somewhere between $96.96 and $286.64 per share. They disagree too widely for us to state a single fair value. We publish the range rather than a midpoint because a number that precise would claim more than the methods can support. This is an educational model, not a price target or a recommendation.
The valuation discounts EPAM Systems, Inc.'s projected free cash flows at a weighted-average cost of capital (WACC) of 12.2%, with a long-run terminal growth rate of 2.5%. About 64% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, EPAM's modeled DCF value ranges from about $98.79 to $149.61 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what EPAM Systems, Inc. would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of EPAM's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind EPAM's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $5,457,100,000 | EPAM FY2025 Form 10-K (accession 0001352010-26-000015, filed 2026-02-26): Revenues $5,457,056K, +15.4% on FY2024's $4,727,940K. MOST OF THAT GROWTH WAS BOUGHT: organic constant-currency growth was 4.9% (Q4/FY2025 release, 8-K Ex-99.1, accession 0001352010-26-000010); the rest is the 2024 acquisitions of NEORIS and First Derivative ($912M of deal cash in 2024) annualizing, plus FX. Calendar fiscal year, so FY2025 is the latest completed 10-K year and FY2026 is Year 1. CROSS-CHECK: H1 2026 revenue $2,814.8M, +6.0% YoY (+3.5% organic cc); Q2 2026 $1,414.8M, +4.5% (+3.4% organic cc) (Q2 2026 release). TTM to 2026-06-30: $5,616.7M. |
| Base EBIT margin | 9.5% | EPAM FY2025 Form 10-K (accession 0001352010-26-000015, filed 2026-02-26): GAAP income from operations $520,003K / $5,457,056K = 9.53%. It is AFTER stock-based compensation $176.8M (3.24% of revenue), amortization of acquired intangibles $71.4M (1.31%), cost-optimization (restructuring) charges $47.9M (0.88%), Ukraine humanitarian costs $14.6M (0.27%) and $1.2M of other deal costs; EPAM's non-GAAP margin, which adds these back, was 15.2% (Q4/FY2025 release reconciliation). Used by the engine only for the cyclical check; the forecast starts from the 2026 guide. CROSS-CHECK: H1 2026 GAAP $269.0M / $2,814.8M = 9.6% (non-GAAP 15.4%); Q2 alone 10.8% GAAP / 16.4% non-GAAP. |
| Forecast revenue growth | 4% → 2% → 3% → 3% → 3% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation. Shared by every researched model in this tracker. |
| Beta | 1.39 | Yahoo Finance / yfinance published 5Y-monthly beta + own regressions: Published 5Y-monthly beta 1.386, used AS IS (rounded to 1.39) - no normalization, consistent with the ACN and CTSH models, which also held their published figures. Recomputed independently: 5Y monthly vs the S&P 500 = 1.32 (59 returns), so the published figure is not a feed error; but the 2-year WEEKLY beta is only 1.12 (104 returns) and the 1-year daily 0.56. The 5-year window contains the 2022 Russian invasion of Ukraine, when EPAM - then with most of its engineers in Ukraine, Belarus and Russia - fell ~70% while the market was also falling, which lifts the measured covariance. I keep the higher figure deliberately: no separate country-risk premium is added, although EPAM still has delivery staff and cash in Ukraine and Belarus (the 10-Q reports $34.1M and $37.5M of cash in banks there), and the stock has just been dropped from the S&P 500 to the SmallCap 600. CONSERVATIVE: using the 2Y weekly 1.12 would add ~$17/share; this is the single biggest discount-rate judgement. |
| Terminal growth | 2.5% | Assumption — house default: House default 2.5% (roughly long-run nominal GDP), kept for comparability. Not obviously conservative: EPAM's growth has been guided down twice in 2026 and the bear case is that AI permanently shrinks the pool of billable engineering hours. 2.0% takes ~$3.60/share off; 3.0% adds ~$4.00. Must stay well below the ~12.2% WACC; it does. |
| Diluted shares | 52M | EPAM Q2 2026 results release, 8-K Ex-99.1 (accession 0001352010-26-000043, furnished 2026-08-06): Q2 2026 weighted-average diluted shares 52,267K (H1 2026 53,220K; FY2025 56,233K). House rule makes this conservative: EPAM retired 3.18M shares in H1 2026 ($409M, including a $300M accelerated repurchase with Morgan Stanley that settled on 2026-04-17 with 2.24M shares in total), so 51,585K were outstanding at 2026-06-30 and Q3 is guided at 51.4M diluted. Because that cash has already left the balance sheet, the larger weighted count charges part of it twice; using 51.4M would add ~$1.90/share. SBC dilution (~$180M a year, ~3% of today's market cap) stays a real expense in EBIT. |
| Market price | $156.82 | Delayed quote · as of 2026-11-10 04:59 UTC |
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