The truth is that if you invest for long enough, you're going to end up with some losing stocks. But the long term shareholders of EPAM Systems, Inc. (NYSE:EPAM) have had an unfortunate run in the last three years. So they might be feeling emotional about the 62% share price collapse, in that time. And more recent buyers are having a tough time too, with a drop of 30% in the last year. The falls have accelerated recently, with the share price down 41% in the last three months. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers in our company report.
After losing 5.9% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
During the unfortunate three years of share price decline, EPAM Systems actually saw its earnings per share (EPS) improve by 5.9% per year. Given the share price reaction, one might suspect that EPS is not a good guide to the business performance during the period (perhaps due to a one-off loss or gain). Or else the company was over-hyped in the past, and so its growth has disappointed.
Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.
Revenue is actually up 16% over the three years, so the share price drop doesn't seem to hinge on revenue, either. This analysis is just perfunctory, but it might be worth researching EPAM Systems more closely, as sometimes stocks fall unfairly. This could present an opportunity.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
NYSE:EPAM Earnings and Revenue Growth May 28th 2024
It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. You can see what analysts are predicting for EPAM Systems in this interactive graph of future profit estimates.
A Different Perspective
Investors in EPAM Systems had a tough year, with a total loss of 30%, against a market gain of about 28%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 2% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for EPAM Systems you should know about.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
EPAM Systems的投資者經歷了艱難的一年,總虧損了30%,而市場漲幅約爲28%。即使是優質股票的股價有時也會下跌,但我們希望在過於感興趣之前看到企業基本指標的改善。好的一面是,長期股東賺了錢,在過去的五年中,每年增長2%。如果基本面數據繼續顯示長期可持續增長,那麼當前的拋售可能是一個值得考慮的機會。儘管市場狀況可能對股價產生的不同影響值得考慮,但還有其他因素更爲重要。例如,考慮風險。每家公司都有它們,我們發現了一個你應該知道的 EPAM Systems 警告標誌。