![]() Its Book Value per share (BVPS) has increased by 26%, on average, since 2010. ![]() The company is run by its founder, Arkadiy Dobkin, an exceptionally talented engineer who emigrated from Belarus to the US in 1993 to found EPAM.ĮPAM has grown its revenue by 29% per year since 2010 (16x growth), with an average EBIT and a net margin of 14% and 10%, respectively. ![]() At my cost price of $210 per share, I estimate that I paid 10x for EPAM’s earnings in Year 3 (assuming 30% revenue growth and 10% net margin). However, it has been providing more complex and innovative solutions (especially in software product development), allowing it to compete and collaborate with the likes of SAP, IBM, Alphabet, and Salesforce.īy providing customers with better and more complex solutions at lower costs, EPAM has grown its sales by 25-35%, on average (11-year revenue CAGR - 29%), faster than many traditional IT outsourcing companies who compete on costs (10-20%).ĮPAM is a great business that experienced a temporary setback and became available at a very attractive price. The company has historically relied on engineers from the ex-USSR region, and in that regard, it is similar to some leading IT companies that rely on Indian IT engineers (Wipro, Infosys, Tata Consultancy, Cognizant). Its critical services include consulting, product development and design, automation and optimisation. It has a unique business model - providing complex solutions at considerably lower costs than its major competitors. we find excuses to keep an ailing company, sitting on rising losses and missing new opportunities).ĮPAM is a fast-growing IT company helping corporate customers in digital transformation. It is essential to state this at the start as our psychology often prevents us from thinking rationally when real trouble comes (i.e. I have deliberately added a section on what would make me sell the stock. Today, I am going to share my thesis on EPAM. Besides, I already have a few companies in the commodity space (e.g. I am keen to add such companies to my portfolio at reduced prices rather than chase cyclical commodity producers for a short-term gain. Many businesses that used to be viewed as exceptional have declined 50% and more. Rising rates and commodity prices have triggered rotation from growth to value stocks. Last month, I became a shareholder in two new businesses. I have not done much with my portfolio since buying Alibaba during September - October 2021.
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