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Epam (EPAM) Gains But Lags Market: What You Should Know

By Zacks Investment ResearchStock MarketsDec 24, 2021 06:15AM ET
www.investing.com/analysis/epam-epam-gains-but-lags-market-what-you-should-know-200612678
Epam (EPAM) Gains But Lags Market: What You Should Know
By Zacks Investment Research   |  Dec 24, 2021 06:15AM ET
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In the latest trading session, Epam (EPAM) closed at $663.08, marking a +0.39% move from the previous day. This change lagged the S&P 500's 0.62% gain on the day. Elsewhere, the Dow gained 0.55%, while the tech-heavy Nasdaq lost 0.03%.

Prior to today's trading, shares of the information technology services provider had gained 6.9% over the past month. This has outpaced the Computer and Technology sector's gain of 0.29% and the S&P 500's gain of 0.87% in that time.

Epam will be looking to display strength as it nears its next earnings release. In that report, analysts expect Epam to post earnings of $2.50 per share. This would mark year-over-year growth of 38.12%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.08 billion, up 49.88% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.78 per share and revenue of $3.74 billion. These totals would mark changes of +38.49% and +40.53%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Epam. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Epam is currently a Zacks Rank #2 (Buy).

Digging into valuation, Epam currently has a Forward P/E ratio of 75.51. For comparison, its industry has an average Forward P/E of 34.22, which means Epam is trading at a premium to the group.

We can also see that EPAM currently has a PEG ratio of 2.7. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Computers - IT Services was holding an average PEG ratio of 1.43 at yesterday's closing price.

The Computers - IT Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 155, putting it in the bottom 39% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow EPAM in the coming trading sessions, be sure to utilize Zacks.com.


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Epam (EPAM) Gains But Lags Market: What You Should Know
 

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Epam (EPAM) Gains But Lags Market: What You Should Know

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