EPAM Systems, Inc. (EPAM) DCF Valuation
TGM's two-stage DCF values EPAM Systems, Inc. (EPAM) between $180.54 and $278.57 depending on assumptions, with a base case of $221.93. Growth is taken from the company's own record (5-year revenue CAGR (FCF growth too volatile to use)), fading to 2.5% long-run; the discount rate (11%) reflects its beta.
What would today's price require?
$95.38 is justified only if free cash flow grows about -10.6% a year (fading to 2.5% long-run) at a 11% required return — slower than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 11.8%/yr | 12.0% | $180.54 |
| Base case | 14.8%/yr | 11.0% | $221.93 |
| Optimistic | 17.8%/yr | 10.0% | $278.57 |
| Analyst DCF (FMP) | independent reference — different model | $161.38 | |
Current Price
$95.38
Market-Implied Growth
-10.6%/yr
vs +4.2% 5Y actual
Model Scenario Range
$180.54 – $278.57
model output — not a price target
EPAM DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for EPAM (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $530.6M · 0.05B shares · net cash $1.2B
Estimated Fair Value
$317.90
+233.3% vs $95.38
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 14.8%/yr FCF growth and 10-year horizon fixed. Green = above today's $95.38; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 9.0% | $391 | $409 | $429 | $453 | $481 |
| 10.0% | $339 | $352 | $366 | $382 | $401 |
| 11.0% | $298 | $308 | $318 | $330 | $343 |
| 12.0% | $266 | $273 | $281 | $289 | $299 |
| 13.0% | $240 | $245 | $251 | $257 | $264 |
About EPAM Systems, Inc.
EPAM Systems, Inc. is a leading global provider of comprehensive digital platform engineering and software development solutions. The company's extensive service portfolio includes: Engineering Services: From initial requirements analysis and strategic platform selection to tailored customization, seamless cross-platform migration, and robust implementation and integration of new systems. Infrastructure Management: Covering the full lifecycle of software development, rigorous testing, and ongoing maintenance across private, public, and mobile infrastructures. This includes overseeing operations for applications, databases, networks, servers, storage, and broader systems management, alongside proactive monitoring, incident notification, and rapid resolution. Maintenance and Support: Ensuring the sustained performance and reliability of client systems. Operational Enhancement: Delivering solutions that streamline processes through integrated engineering practices and intelligent automation. Optimization Services: Focused on quality assurance, these include advanced software application testing, meticulous test management, automated testing, and consulting to elevate clients' existing QA practices. They also provide specialized testing to uncover potential threats and fortify business systems against information loss and cyber vulnerabilities. Consulting and Advisory: Offering expert guidance across various domains such as business strategy, user experience, technology roadmaps, data analytics, and technical advisory. Design and Innovation: Crafting digital and service design solutions, encompassing strategic planning, creative execution, and program management. Additionally, EPAM drives physical product development, leveraging cutting-edge technologies like artificial intelligence (AI), robotics, and virtual reality (VR). EPAM caters to a diverse global clientele across numerous sectors, including financial services, travel and consumer goods, software and high-tech, business information and media, and the life sciences and healthcare industries. Established in 1993, the company maintains its headquarters in Newtown, Pennsylvania.
- Sector
- Technology
- Industry
- Information Technology Services
- CEO
- Balazs Fejes