1. Prospective Equity Report (8-Nov-16)
EPAM Systems Incorporated (NYSE:EPAM)

2. Technology Sector Outlook
Bull
Increase PMI Indicators with Spending Increases in IT Field
LT Revenue Growth at least 20%
Increase in Demand for Cloud Computing for SBU’s in Increasing Globalized
World
Companies Continue to consistently Outperform Overall Annual Earnings
Bear
ST Revenue Growth Stymied by Macro Environment
Volatility in Investment into Emerging Technologies
Regulations and Political Interference with pending M&A

3. CEO : Arkadiy Dobkin (Since 2002)
Headquarters : Newtown, PA
Founded : 1993
Exchange : NYSE
Employed : 18,354
“1st Company to IPO from Outsourcing
Industry in Eastern Europe.”- BBC 2012
EPAM provides software engineering solutions and technology consulting services worldwide.
The company offers software product development services, including product research,
customer experience design and prototyping, program management, component design and
integration, lifecycle software testing, product deployment and end-user customization,
performance tuning, product support and maintenance, and managed services,
as well as porting and cross-platform migration
EPAM Systems Background

4. I. Overview

5.  1.) Dynamic Organic Growth
 2.) Superior Profitability
 3.) Diversifiable Geographic Coverage
 4.) Deep Vertical Expertise across multiple
Industries
 5.) Meaningful Acquisitions
Investment Highlights

6. Consistent Organic Growth & Geographic Coverage
Past Performance Measures

7.  Deep Diversifiable Vertical Expertise
 More per-capita human resources in Central Europe than India and North America stem from
Central Europe; with a strong heritage of technology and engineering excellence backed by
the educational system focus. (OECD Intelligence Report 2015)
 EPAM capitalizes on near shore delivery capabilities for European clients - quickly growing
and less penetrated market
Past Performance Measures

8. Profitability
Revenue Growth CAGR ( Past 5 years) – (33.7% vs. Industry Average 16.45%)
Operating Income CAGR (Past 5 years) – (57.8 % vs. Industry Average 28.3%)
SG&AAs % of Revenue Has Decreased in 2012 from 44% to 29% in 2015
Effective Tax Rate – (20.66 % vs. Industry Average 36.65)
SURP Rating – (8.76 % vs. ACN -7.54)
Stock Performance
November 2, 2012 – $17.74
November 2, 2016 - $ 61.25
262% Price Growth
Has outperformed the S&P 500 Considerably
Has P/E of 32.32 ( ACN:18.6, IBM:12.57)
Top Clients
Expedia, Google, SAP and Oracle
Past Performance Measures

9.  Pivotal Acquisitions
2012 : Thought Corp and Empathy Lab
IT Consultancy, software engineering and Digital and Omni-channel UXD
2014 : JoinTech, GGA Software Services, Great Fridays
Healthcare technology consulting, Technology Services, Scientific information Services, product and
service Design Services
2015 : Navigation Arts and Alliance Global Services
Digital Strategy and User Experience Systems, Software Product Development, Test Automation
2016 : Dextreys
Software engineering and Application Development
Past Performance Measures

10. Competitor Snap Shot

11. Competitor Snap Shot
In the 2016 Forbes Fastest
Growing Tech Companies, EPAM
Systems was Named #6.
On Forbes 100 Fasting Growing
Companies EPAM Systems was
ranked #59.

12. Competitor Snap Shot

13. II. Financial Valuation

14. EPAM Valuation Model

15. EPAM Valuation Model

16. EPAM Valuation Model

17. Analyst Recommendation
Financial Community Consensus as of 11/08/16
UBS : Strong Buy Consensus Rating (B/H/S)- 89.5%, 10.5%, 0%
Barclays : Overweight
JP Morgan : Overweight Target Price- $79.03 Upside: 50% Downside:
8.3%
Pacific Crest : Overweight
William Blair & CO : Out-Perform 5 Year Target Price $111
Recommendation: Buy