EPAM Systems, Inc. (EPAM) research, news, and more from GeoInvesting

Company description

Fri, 02 Mar 2012 05:00:00 GMT

EPAM Systems, Inc. provides software product development services, software engineering, and custom development solutions in North America, Europe, and the Common Wealth of Independent States. The company’s software product development services include product research, design and prototyping, product development, component design and integration, full lifecycle software testing, product deployment and end-user customization, performance tuning, and product support and maintenance, as well as porting and cross-platform migration. Its custom application development services comprise business and technical requirements analysis, solution architecture creation and validation, development, component design and integration, quality assurance and testing, deployment, performance tuning, support and maintenance, legacy applications re-engineering/refactoring, and porting and cross-platform migration and documentation. EPAM Systems also provides application testing services consisting of software application testing, testing for enterprise IT, and consulting services. In addition, it offers enterprise application platform services that include requirements analysis and platform selection, deep and complex customization, cross-platform migration, and implementation and integration, as well as support and maintenance. Further, the company provides application maintenance and support services, such as incident management, fault investigation diagnosis, work-around provision, application bug fixes, release management, application enhancements, and third-party maintenance; and infrastructure management services. It serves banking, financial services, business information, media, travel and hospitality, retail, energy, telecommunications, automotive, manufacturing, and life sciences industries, as well as the government. The company was founded in 1993 and is headquartered in Newtown, Pennsylvania.

Research

Tue, 27 Mar 2012 04:00:00 GMT

Our premium research note from our New High Blog from 3/2/2012:

Recent IPO. Has not traded much higher then its offering price. Referencing its IPO prospectus the company has grown its EPS at an above average clip. The company is a leading global provider of IT services. Company is capitalizing on an increasing trend where companies are outsourcing their IT needs. If the company can continue its current growth track we believe the stock can attain a trailing PE of 25 which would equate to a near term price target of $25.

To be among the first to receive alerts like this, subscribe to our premium service!

Comments & Business Outlook

Tue, 27 Mar 2012 04:00:00 GMT

Fourth Quarter 2011 Results

Quarterly revenues increased to a record $95.1 million, up 34.4% compared to the year-ago quarter and 10.1% sequentially
Quarterly diluted earnings per share (EPS) on a GAAP basis was $0.29, compared to $0.27 in the year-ago quarter
Quarterly, Non-GAAP diluted EPS was $0.30, compared to $0.31 in the year-ago quarter
Net headcount for IT professionals increased 30.2% to 6,968 as of December 31, 2011, from 5,350 as of December 31, 2010

Arkadiy Dobkin, CEO and President of EPAM Systems said, “We are pleased to have completed our initial public offering in February, and are excited to share our results with you for our first quarter as a public company. I would like to thank our entire staff, business partners and everyone who helped make our IPO a success.”

“Despite the global macroeconomic uncertainty, 2011 was a very successful year for EPAM as we delivered strong growth across our targeted services areas, verticals and geographies. First, we benefited from an increased reliance on offshore outsourcing in Europe, where we remain well- positioned to capitalize on this rapidly growing trend. At the same time we have been successfully converting from a highly specialized software engineering shop that served mostly global leading ISVs, into one of the preferred vendors in key and rapidly growing vertical segments. In today’s challenging environment of yet another massive technology conversion, companies are in search for reliable partners with strong engineering heritage and proven hands-on expertise in such emerging trends as social enterprise and enterprise mobility, and cloud and big data. Clients are expecting to receive real help and guidance in delivering complex solutions and services cost-effectively by utilizing a global delivery model but with quality they expected in the past only from local specialized vendors and professional services divisions of leading software product vendors.”

EPAM generated cash from operations of $26.3m in the fourth quarter of 2011, an increase of $7.6m generated over the fourth quarter of 2010. As of December 31, 2011 EPAM had cash and cash equivalents of $88.8 million and $30.0 million of available borrowings under a revolving line of credit, which expires on October 15, 2013. Currently, the Company has no outstanding borrowings under its revolver.

First Quarter and Full Year 2012 Outlook

EPAM is providing the following guidance:

First quarter 2012 Revenue of between $92 million and $94 million, representing a growth rate of 26% to 29% over 2011 revenue.
First quarter 2012 non-GAAP diluted EPS is expected to be in the range of $0.28 to $0.30. These non-GAAP diluted EPS estimates are based on 2012 fiscal year weighted average of 46.3 million diluted shares.
Full year 2012 Revenue expected to be between $411 million and $418 million, representing a growth rate of 23% to 25% over 2011 revenue.
On a full year basis, we expect non-GAAP net income growth to be in the range of 10% - 12% with a tax rate of approximately 17%.