Stifel cuts EPAM Systems stock price target to $240, maintains Buy

On Friday, Stifel analysts adjusted the price target for EPAM Systems (NYSE:EPAM) to $240 from the previous $275 while sustaining a Buy rating on the company’s shares. The revision reflects a conservative stance on revenue growth, moving it to the midpoint of the guidance at a 3% organic constant currency (cc) increase, a slight decrease from the previously projected 4%. This adjustment is attributed to potential customer delays or deferrals caused by the uncertainty surrounding tariffs, even though the consensus remains aligned. According to InvestingPro data, EPAM’s stock has declined over 32% year-to-date, potentially presenting value for investors, though it currently trades at a P/E ratio of 20.27x.

The Stifel analyst pointed out that currency fluctuations have been favorable over the past 90 days, with an estimated positive impact of more than 200 basis points, prompting an adjustment to revenue projections. The firm anticipates earnings before interest and taxes (EBIT) to hover around the midpoint of the guidance, approximately 15%, which is down by around 150 basis points year-over-year. Despite these changes, the earnings per share (EPS) forecasts for 2025 and 2026 are largely unchanged. InvestingPro analysis reveals the company maintains strong financial health with a GOOD overall score, supported by robust liquidity ratios and minimal debt exposure.

EPAM Systems was recently added to the Stifel Select List, a decision not based on the quarterly performance but rather on the company’s historically low trading multiples against depressed earnings. This positions EPAM as an attractive investment option for discerning growth investors. The year 2025 is seen as a transitional period before the impact of tariffs, suggesting a lower risk for downward estimate revisions compared to peers and a potential increase in 2026 EPS if economic growth reaccelerates. For deeper insights into EPAM’s valuation and growth prospects, investors can access comprehensive analysis and 8 additional ProTips through InvestingPro’s detailed research reports.

The report also notes that company-specific challenges, such as those stemming from the Russian invasion of Ukraine, are expected to begin subsiding later in the year and continue improving into 2026. Furthermore, EPAM’s unique standing at the higher end of the services stack is likely to benefit from long-term secular growth drivers, such as the adoption of enterprise AI. With revenue growth forecast at 12% for FY2025 and a strong balance sheet showing more cash than debt, EPAM demonstrates resilient fundamentals despite recent market volatility.

In other recent news, EPAM Systems has expanded its collaboration with Amazon (NASDAQ:AMZN) Web Services (AWS) to enhance generative artificial intelligence solutions. This partnership aims to help enterprises migrate workloads to AWS more efficiently and modernize applications using advanced AI services. Additionally, Guggenheim has adjusted its price target for EPAM Systems to $210, down from $285, while maintaining a Buy rating. Despite the lowered target, Guggenheim’s analyst expressed optimism about EPAM’s potential for organic revenue growth acceleration in 2025. In contrast, Piper Sandler downgraded EPAM Systems from Overweight to Neutral, setting a new price target of $170, citing concerns over a subdued demand environment. Meanwhile, Mizuho (NYSE:MFG) Securities reduced its price target to $267 from $282, maintaining an Outperform rating, reflecting optimism about EPAM’s future performance despite a transitional period anticipated in 2025. These developments highlight varying analyst perspectives on EPAM Systems’ growth prospects amid current market conditions.

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