Is EPAM Systems, Inc. overvalued or undervalued?

As of 7 July 2025, the valuation grade for EPAM Systems, Inc. moved from expensive to fair, indicating a shift in its perceived value. The company is currently fairly valued based on its metrics. Key ratios include a P/E ratio of 24, an EV to EBITDA of 13.15, and a Price to Book Value of 2.77. In comparison, a peer, such as EPAM Systems itself, shows a P/E of 22.0071 and an EV to EBITDA of 11.682, suggesting that EPAM is aligned with its peers in terms of valuation.
Despite this fair valuation, EPAM has underperformed relative to the S&P 500, with a year-to-date return of -33.34% compared to the S&P 500's 12.22%. This significant underperformance over multiple periods, including a 5-year return of -50.70% versus the S&P 500's 96.61%, raises concerns about the company's growth prospects despite its current valuation metrics.