Research
Research Alert: Epam Modestly Lowers Fy 26 Revenue Forecast, Offset By Improved Eps View
CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:EPAM reported Q1 sales of $1.400B (+8% Y/Y), beating consensus ($1.394B), with organic growth of 3.7% decelerating from 5.6% in Q4 and 7.1% in Q3 but up from 1.4% growth in Q1 2025. Growth was led by Financial Services (+12%) and Software & Hi-Tech (+11%), with Business Information & Media (-0.7%) underperforming. Non-GAAP EPS of $2.86 (+19%) beat expectations ($2.75), with help from operating margin expanding 80 bps Y/Y (to 14.3%) and $324M of share repurchases. Management disappointingly lowered 2026 revenue guidance to a midpoint of 5.25% from a prior view of 6.0% (organic CC 3.75% vs. prior 4.5%) but raised EPS guidance to a midpoint of $13.13 from $12.59 as profitability improves and share count declines. While the lower sales view may fuel bears' AI competition fears, we suspect the downtick relates more to rising macro uncertainty, and we are encouraged by continued efficiency gains. Fixed-price contracts continue rising (21.7% of sales, +260 bps Y/Y), creating opportunities for margin outperformance.
$EPAM