Exactly two years ago, we noted in "EPAM Systems, Inc.: Collateral Damage" that the group had been executing a forced pivot toward India since the war in Ukraine began.
This, unfortunately, has not shielded it from the widespread investor distrust currently hitting the sector. Much like Italy's Reply and many other names in the consulting space, the artificial intelligence steamroller has compressed valuations across the board.
Some observers point out that this new technological revolution could lead to two very different outcomes: it will either permanently eat up the very bread and butter of consulting firms, or, conversely, represent a formidable accelerator in terms of both cost savings and new opportunities.
EPAM, which commands an enterprise value of $4bn and a Fort Knox-like balance sheet - with no net debt and significant cash reserves - has nearly quintupled its revenue and operating profit over the last decade, almost entirely through organic growth and without diluting historical shareholders.
Value creation has therefore been exceptional, a fact investors previously rewarded by assigning the Pennsylvania-based company an average multiple of 30x its operating profit - reaching as high as 70x at the peak of the Covid speculative bubble.
Much has changed since then, as EPAM now trades at less than 6x its operating profit, despite the fact that the company returned to growth in 2025 after three years of stagnation, and recently posted excellent quarterly results.
