Why EPAM Systems Sank This Week

Group 1 - EPAM Systems' shares fell 16.4% this week despite beating earnings expectations, indicating investor concerns about future growth guidance [1][2] - In Q4, EPAM reported a revenue increase of 12.8% to $1.41 billion and adjusted EPS growth of 14.8% to $3.26 per share, but organic revenue growth was only 5.6% for Q4 and 4.9% for the full year [2][3] - Management's guidance for 2026 revenue growth is projected between 4.5% and 7.5%, with organic growth between 3% and 6%, suggesting a slowdown in growth expectations [3] Group 2 - Management stated that there is no pricing pressure from AI, but enterprises are taking longer with IT plans, which may slow down growth [4] - A significant client of NOERIS, a subsidiary acquired by EPAM, is reducing business, which will negatively impact EPAM's 2026 growth rate by about one percentage point [4] - Following the sell-off, EPAM trades at a valuation of just under 11 times this year's adjusted EPS guidance, which appears low compared to other consulting firms [5][6]