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If You Invested $1000 in Epam a Decade Ago, This is How Much It'd Be Worth Now

Zacks Equity Research
·4-min read

How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.

Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.

What if you'd invested in Epam (EPAM) ten years ago? It may not have been easy to hold on to EPAM for all that time, but if you did, how much would your investment be worth today?

Epam's Business In-Depth

With that in mind, let's take a look at Epam's main business drivers.

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Headquartered at Newtown, PA, EPAM Systems, Inc. is well known for its software engineering and IT consulting services.

The company is engaged in providing software product development services, custom application development services, application testing services, application maintenance and support services, infrastructure management services and enterprise information management services.

Its software product development services include product research, design and prototyping, product development, component design and integration. EPAM’s custom application development services comprise business and technical requirements analysis, solution architecture creation and validation, development, component design and integration.

Under the application testing services, the company offers software application testing, testing for enterprise IT, and consulting services. Further, it provides services like incident management, fault investigation diagnosis, work-around provision, application bug fixes, release management, application enhancements, and third-party maintenance under the application maintenance and support services.

EPAM’s infrastructure management services include applications, database, network, server, storage, and systems operations management, as well as incident notification and resolutions. Through its enterprise information management services, the company helps organizations in improving business processes, thereby achieving greater operational excellence.

EPAM generated total revenues of $3.76 billion in 2021. The company has six operating verticals — Financial Services (22.6% of FY21 revenues), Travel and Consumer (19.7%), Software & Hi-Tech (17.7%), Business Information & Media (17.7%), Life Sciences & Healthcare (10.4%) and Emerging Verticals (11.9%).

The company has a huge client base, which includes majority of Forbes Global 2000 corporations operating across North America, Europe, CIS (Commonwealth of Independent States) and APAC (Asia including India and Australia). In 2020, the company generated 60% of its revenues from North America, 33.1% from Europe, 4.3% from CIS and 2.6% from APAC.

Bottom Line

Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Epam a decade ago, you're probably feeling pretty good about your investment today.

A $1000 investment made in August 2012 would be worth $25,060.93, or a gain of 2,406.09%, as of August 10, 2022, according to our calculations. This return excludes dividends but includes price appreciation.

Compare this to the S&P 500's rally of 193.87% and gold's return of 6.37% over the same time frame.

Looking ahead, analysts are expecting more upside for EPAM.

EPAM is benefiting from ongoing digital transformation and continued focus on customer engagement and product development. The company is benefiting from growth across all geographies and multiple industry verticals. Digital transformation, focus on customer engagement and product developments have been key catalysts. Acquisitions and partnerships are also aiding top-line growth. The latest forecast for worldwide IT spending by Gartner is a positive for EPAM. However, competition from companies like Accenture and Infosys is a constant pressure. Notably, the company’s largest delivery centers are located in Belarus, Russia and Ukraine. The ongoing conflict is likely to continue disrupting the company’s overall business operations in the near-term. Shares of the company have underperformed the industry year-to-date.

Shares have gained 37.66% over the past four weeks and there have been 3 higher earnings estimate revisions for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.
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