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Epam Systems Inc

EPAMWithin band

Held by 1 superinvestor.

Price$122.19
Holders1
Total value$46.6M

SEC 10-K · fundamentals

Business quality

As of 2025-12-31

Valuation basis: trailing twelve months to 2026-06-30 — latest 10-K plus unaudited 10-Q filings.

Revenue growth
+15.4%
Net margin
6.9%
ROE
10.3%
FCF margin
11.2%
Revenue $2.66B → $5.46B · 6y
What makes a business high quality

Valuation · value band

In fair-value range

$85/ sh · growth-anchored intrinsic value
margin of safety
fair value
above fair value
$122
cheaperpricier

Zero-growth floor

$83

Central IV

$85

Optimistic top

$133

Epam Systems Inc (EPAM): Two methods value the business — a conservative owner-earnings DCF and a growth-credited Greenwald estimate, $83–$133 / sh. Today’s price sits inside both (price $122 as of 2026-10-16).

The middle figure is the main read. The right end is the optimistic case under the same conservative caps — not an absolute ceiling.

  • Recent earnings are below the multi-year average, so the band uses the lower run-rate.

Revenue growth 0% (history declining, capped at zero) · moat 10 yr · discount 10.8% · Zero-growth downside $83

Price as of 2026-10-16 · yahoo · DGS10 5.1% @ 2026-10-15.

Method & numbers

Model cautions

  • The two methods’ midpoints differ materially — growth assumptions warrant review (over 20%).

A conservative intrinsic-value band (zero-growth floor to growth-capped DCF) plus a tangible asset floor — not investment advice, not a buy/sell signal, and not a price target.

Owner-earnings DCF $76.17 – $95.21 · Greenwald $133.18 – $133.18 (neutral $133.18) · zero-growth base $133.18 · reproduction $37.17

Moat Franchise (moat) · terminal value 36% of present value · owner-earnings yield 7% vs 10Y 5.1%.

Graham earnings-power value (normalized NOPAT)$111.63 – $133.18 / sh

Normalized NOPAT = average operating margin over the years shown × latest-year revenue × (1 − normalized tax); then + D&A − maintenance capex (write A). Unlevered (pre-interest, attributable to all capital). Capitalized at the 9–11% rate band (read as a WACC proxy). Enterprise → equity bridge applied: + cash − total debt.

Years: TTM 2026-06-30, 2024, 2023, 2022, 2021

v1 simplifications: Maintenance capex (degraded) deducted in full cash (write A): EPV = (NOPAT + D&A − maintenance capex) / WACC; no tax shield on the capex term. Maintenance-capex methods diverge by 557% (> 50%); estimate is degraded. Share-based compensation is left as a real expense (not added back). Operating margin is below its multi-year average (cyclical/declining): normalized margin capped at the latest year — no peak-margin capitalization (audit #2).

Buffett owner-earnings value$83.09 – $101.56 / sh

Owner earnings = average net income + average D&A − maintenance capex (zero-growth floor; no ΔNWC). Levered (starts from net income, already after interest — an equity-holder stream). Capitalized at the 9–11% rate band (read as a cost-of-equity proxy). No enterprise→equity bridge: the capitalized result is already equity value (subtracting debt would double-count interest).

Years: TTM 2026-06-30, 2024, 2023, 2022, 2021

v1 simplifications: Net income is below its multi-year average (cyclical/declining): normalized owner earnings anchored to the latest year — no peak-earnings capitalization (audit #2). Owner earnings = net income + D&A − maintenance capex (degraded); the working-capital change is excluded (maintenance ΔNWC ≈ 0; growth ΔNWC is carried in growth value, not double-counted). Maintenance-capex methods diverge by 557% (> 50%); estimate is degraded. One-time items are not separately normalized (multi-year averaging smooths them partially). Share-based compensation is left as a real expense (not added back); see the SBC/OE disclosure. Capitalized at the 9–11% band as a cost-of-equity proxy; no leverage premium applied (net cash or debt within the no-charge range).

Reproduction value = tangible net assets $1.94B = $37.17 / sh. Tangible net assets = shareholders' equity − goodwill − intangibles, ÷ diluted shares (no R&D history to capitalize).

Moat reading: Franchise test compares earnings power (EPV) against reproduction value on both AV_conservative (tangible + capitalized R&D) and AV_reproduction (conservative + acquired-reset proxy). Both must clear the franchise multiple for a moat signal; near it, a commodity; below it, value destruction. A directional reading, not a verdict.

Assumes a narrow moat · competitive-advantage period ≈ 10 years.

Growth value: if the moat holds for 10 yr at ROIIC ≈ 2%, $0.00–$0.00 / sh (neutral $0.00). Conservative, not a forecast.

Window TTM 2026-06-30, FY 2024, 2023, 2022, 2021 · discount band 9%–11% · normalized tax 20% (Average effective tax rate over 5 year(s), capped at the statutory 21%.) · diluted shares.

Owner-earnings DCF: growth g₁ 0% (history declining → capped at 0) · OE FY TTM 2026-06-30, 2024, 2023, 2022, 2021 · Discount band: 9.60%–12.00% (DGS10 +4.5% to a 12% strict end, as of 2026-10-15). No enterprise→equity bridge: owner earnings already flow to shareholders (post-interest), so no net cash is added and no debt subtracted — matching the engine owner-earnings lamp. Two-method midpoint gap 45%.

Valuation basis: trailing twelve months to 2026-06-30 — latest 10-K plus unaudited 10-Q filings.

What the price is betting

Today's price pencils in about 7.1% a year in owner-earnings for the next few years. Revenue actually grew 12.9% a year.

Below what it has already done.

Roughly, the price needs its historical revenue growth to run about 4 more years to hold up.

Even when the value band is low-confidence: use this to see what the price assumes — not as a cheapness confirmation.

How to read intrinsic value

SEC 13F · holders

Superinvestors Holding This Security

1 holder · $46.6M combined · this quarter +1 opened / -1 exited

This quarter1 opened1 exited
Holders 2 → 1 · last 7 quarters
Exited this quarter (1)
Jeremy Grantham

SEC 13F · notes

Written summary

Epam Systems Inc (EPAM) is held by 1 of the superinvestors tracked on Compounder, with a combined $46.6M in reported 13F value. The largest position belongs to Edgar Wachenheim, where it makes up 0.5% of the portfolio.

In the quarter ended 2026-06-30, 1 of the tracked filers opened a new position in EPAM, 0 added to existing ones, 0 trimmed, and 1 sold out entirely.

Holder counts and values reflect the most recent SEC Form 13F filings, through the quarter ended 2026-06-30. Source: SEC EDGAR. A 13F shows only long US-listed positions and can lag the real portfolio by up to 45 days, so this is disclosed long ownership, not a complete picture.

How to read a 13F

SEC 13F · co-ownership

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Also on

Sources· SEC EDGAR 13F as of 2026-06-30 · filed 2026-08-13

Educational data only — not investment advice. 13F positions are self-reported and can lag up to 45 days.

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