Key insights
- Stifel reaffirmed a Buy rating on EPAM but lowered its 2026 revenue growth estimate due to geopolitical uncertainty. While near-term growth is expected to be stable, improvements are anticipated in the second half of the year. The current valuation suggests limited downside from estimate revisions, and InvestingPro data indicates the stock is undervalued. Upward earnings revisions by other analysts provide a slightly positive signal.
Investing.com - Stifel reaffirmed a Buy rating and $246.00 price target on EPAM Systems (NYSE:EPAM) while reducing its 2026 revenue growth estimate for the IT consulting company.
The firm lowered its 2026 organic constant currency revenue growth forecast to 5.3% from 6.3%, citing incremental uncertainty created by the Iranian conflict. The revised estimate remains above the midpoint of EPAM’s guidance range of 3% to 6% and consensus expectations of 5%.
Stifel noted that quarter-end checks suggest demand remains relatively stable, but consulting and professional services growth is unlikely to accelerate in the near term. The firm expects growth to improve as the year progresses, with second-half growth of 6% year-over-year versus 4% in the first half.
The firm maintained its first-quarter and other assumptions unchanged. EPAM trades at 6.5 times unlevered free cash flow, which Stifel said suggests any impact from estimate reductions should be minimal. The company’s free cash flow yield stands at 8%, and InvestingPro data indicates the stock is currently undervalued relative to its Fair Value, suggesting potential upside for investors. Despite the stock’s 34% decline year-to-date to $135.19, the company maintains a "GOOD" financial health score.
Stifel said other analysts may also need to reduce estimates, including for the second quarter. Interestingly, InvestingPro Tips reveal that 7 analysts have recently revised their earnings upwards for the upcoming period. For deeper analysis, EPAM is one of 1,400+ US equities covered by comprehensive Pro Research Reports, which transform complex Wall Street data into clear, actionable intelligence. The firm noted that Infosys and IBM are other companies in its coverage requiring more detailed review, though any adjustments should be smaller.
In other recent news, EPAM Systems has been actively engaging with investors and analysts, highlighting its strategic focus on artificial intelligence. During its 2026 Investor Day in Boston, EPAM outlined its medium-term growth and profitability outlook, emphasizing its positioning in the AI services market. Following this event, Mizuho raised its price target for EPAM Systems to $200, maintaining an Outperform rating. Additionally, Stifel reiterated its Buy rating with a $246 price target, noting EPAM’s relevance in an AI-driven market due to its high-end software engineering capabilities.
TD Cowen also maintained a Buy rating, setting a $220 price target, and highlighted the company’s plans to boost revenue growth by capturing opportunities in AI-native and Foundational AI services. Furthermore, EPAM Systems has joined the Microsoft Intelligent Security Association, enhancing its security services by integrating with Microsoft Security technologies like Microsoft Sentinel and Microsoft Defender XDR. This membership reflects EPAM’s commitment to offering engineering-led security services. These recent developments underscore EPAM’s strategic initiatives and market positioning, particularly in the AI and security sectors.
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