Is EPAM Systems, Inc. overvalued or undervalued?

As of 18 February 2025, the valuation grade for EPAM Systems, Inc. has moved from expensive to fair, indicating a more favorable assessment of its market position. The company is currently fairly valued, with a P/E ratio of 24, a Price to Book Value of 2.77, and an EV to EBITDA ratio of 13.15. These metrics suggest that while the company is not undervalued, it is also not excessively priced compared to its earnings potential.
In comparison to peers, EPAM's P/E ratio of 22.32 and EV to EBITDA of 12.35 indicate that it is in line with industry standards, suggesting a balanced valuation relative to its competitors. Notably, EPAM's ROCE stands at an impressive 21.59%, reflecting strong operational efficiency. Despite recent underperformance against the S&P 500, with a year-to-date decline of 28.15% compared to a 2.44% gain for the index, the current valuation suggests that EPAM Systems, Inc. is positioned fairly in the market.