EPAM Expands With First Derivative Buyout: What Should Investors Do?

Zacks10-08

EPAM Systems EPAM has seen its share price plunge 35.3% year to date, underperforming the Zacks Computers - IT Services industry, Zacks Computer and Technology sector and the S&P 500’s return of 8.4%,...

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This AI-po","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0742534661.SGD":"Fidelity America A-SGD (hedged)","BK4585":"ETF&股票定投概念","LU0943347566.SGD":"安联收益及增长平衡基金AM H2-SGD","CRM":"赛富时","LU0234570918.USD":"高盛全球核心股票组合Acc Close","LU0187121727.USD":"FIDELITY SUSTAINABLE US EQUITY \"A\" (USD) INC","LU0048573561.USD":"FIDELITY AMERICA \"A\" (USD) INC","BK4525":"远程办公概念","IE0004091025.USD":"BNY MELLON GLOBAL OPPORTUNITIES \"B\" (USD) ACC","BK4587":"ChatGPT概念","LU1316542783.SGD":"Janus Henderson Horizon Global Technology Leaders A2 SGD","IE00BJJMRX11.SGD":"Janus Henderson Balanced A Acc SGD","IE00BJTD4V19.USD":"NEUBERGER BERMAN US LONG SHORT EQUITY \"A1\" (USD) ACC","LU1046421795.USD":"富达环球科技A-ACC","IE00BDCRKT87.USD":"PINEBRIDGE GLOBAL DYNAMIC ASSET ALLOCATION \"ADC\" (USD) INC","BK4527":"明星科技股","BK4561":"索罗斯持仓","IE00BJJMRY28.SGD":"Janus Henderson Balanced A Inc SGD","LU0127658192.USD":"EASTSPRING INVESTMENTS GLOBAL TECHNOLOGY \"A\" (USD) ACC","BK4588":"碎股","EPAM":"Epam Systems","LU0234572021.USD":"高盛美国核心股票组合Acc","BK4503":"景林资产持仓","LU0820561909.HKD":"ALLIANZ INCOME AND GROWTH \"AM\" (HKD) INC","IE00BFXG0V08.USD":"BNY MELLON GLOBAL LEADERS \"B\" (USD) ACC","IE0005OL40V9.USD":"JANUS HENDERSON BALANCED \"A6M\" (USD) INC","LU1804176565.USD":"EASTSPRING INV GLOBAL GROWTH EQUITY \"A\" (USD) ACC","BK4134":"信息科技咨询与其它服务","LU2045819591.USD":"Natixis WCM Global Emerging Markets Equity R/A USD","BK4505":"高瓴资本持仓","IE0004445015.USD":"JANUS HENDERSON BALANCED \"A2\" (USD) ACC","IE00BZ1G4Q59.USD":"LEGG MASON CLEARBRIDGE US EQUITY SUSTAINABILITY LEADER \"A\"(USD) INC (A)","MSFT":"微软","BK4504":"桥水持仓","LU2125910500.SGD":"Natixis WCM Global Emerging Markets Equity H-R/A SGD","ISBC":"投资者银行","LU0689472784.USD":"安联收益及增长基金Cl AM AT Acc","LU0719512351.SGD":"JPMorgan Funds - US Technology A (acc) SGD","IE00B19Z8X17.USD":"FTGF CLEARBRIDGE US LARGE CAP GROWTH  \"AG\" (USD) ACC","BK4211":"区域性银行","LU0642271901.SGD":"Janus Henderson Horizon Global Technology Leaders A2 SGD-H","LU0238689110.USD":"贝莱德环球动力股票基金","LU0477156797.USD":"HARRIS ASSOCIATES GLOBAL EQUITY \"RE\" (USD) ACC","BK4530":"医药外包概念","LU0477156953.USD":"HARRIS ASSOCIATES US VALUE EQUITY \"RE\" (USD) ACC","IQV":"艾昆纬","BK4023":"应用软件","BK4528":"SaaS概念","IE00BKVL7J92.USD":"Legg Mason ClearBridge - US Equity Sustainability Leaders A Acc USD","BK4592":"伊斯兰概念"},"translate_title":"EPAM通过首次衍生品收购扩张：投资者应该做什么？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"IQV":1,"ISBC":1,"EPAM":1,"CRM":1,"MSFT":0.7},"content_text":"EPAM Systems EPAM has seen its share price plunge 35.3% year to date, underperforming the Zacks Computers - IT Services industry, Zacks Computer and Technology sector and the S&P 500’s return of 8.4%, 22.3% and 19.6%, respectively.\nThe underperformance of EPAM’s shares can be attributable to highly volatile market conditions amid the ongoing macroeconomic uncertainties. Factors, including investors’ concerns over the Federal Reserve's interest rate policies and fears of a looming U.S. recession, have weighed on tech companies and that has not spared Epam either.\nEpam’s sales decline has also made investors cautious about its near-term prospects. The company’s revenues have been in a continuous declining trend since the second quarter of 2023. Also, the ongoing Russo-Ukrainian war has affected the company's top line. However, the company is trying to recover both inorganically and organically.\nEPAM Expands Through Acquisitions\nEPAM is working to recover from this downturn by pursuing strategic acquisitions aimed at expanding its market presence and enhancing its product expertise. In 2024, the company acquired Odysseus and previously announced an agreement to acquire NEORIS, further strengthening its capabilities.\nEpam Systems recently announced that it has also signed an agreement to acquire First Derivative, a Northern Ireland-based consulting and managed services business specializing in capital markets and financial services. This acquisition will bring more than 100 clients from capital markets, banking operations and asset servicing markets.\nThe acquisition of First Derivative will deepen EPAM’s presence in North America, Europe, and the APAC region since the bank has its financial operations in these geographies. EPAM will further combine its digital transformation expertise with First Derivative’s generative AI-enabled financial and business solutions. The acquisition is expected to close by the fourth quarter of 2024, pending regulatory approvals.\nEPAM YTD Performance Chart\nImage Source: Zacks Investment Research\nEPAM Strengthens Footprints in the AI Arena\nIn the past year, Epam Systems has achieved numerous milestones in the artificial intelligence (AI) space. EPAM became a partner of Microsoft’s MSFT Globally Managed Enterprise Systems Integrator (SI), which expanded its AI capabilities.\nEPAM has been a long-term collaborator of Microsoft for its cloud needs. The recent promotion in its partner status will enable EPAM to build cloud-based applications through Azure OpenAI Service.\nEPAM is a Salesforce CRM partner for the latter’s AI capabilities. In the realm of data management, Epam Systems has partners like IQVIA IQV, Informatica, MicroStrategy and MongoDB.\nEpam Systems’ partnership with CRM gave rise to the Salesforce Service Agent AI Coach. This AI-powered tool analyzes interactions between customer service agents and customers. EPAM takes data and advanced analytics solutions in the life science space from IQVIA.\nTo advance its footprint in the AI space, EPAM also launched the AI-powered DIAL Open Source Platform and DIAL Orchestration Platform in 2023.\nEconomic and Competitive Headwinds\nEPAM’s near-term prospects are likely to have been hurt by weakening IT spending. Still-high interest rates and protracted inflationary conditions are affecting consumer spending. Enterprises are also postponing their large IT spending plans due to a softening global economy amid ongoing macroeconomic and geopolitical issues. This does not bode well for EPAM’s prospects in the near term.\nEpam Systems also faces tough competition in the software market, with numerous players ranging from large global firms to specialized boutique firms. EPAM’s competition is with major players like Accenture, Cognizant and Infosys, which have significantly larger resource bases and broader service offerings. These competitors have been aggressively expanding their capabilities and market reach, which could potentially erode EPAM's market share.\nWhat Should Investors Do?\nAlthough Epam Systems’ shares have been experiencing a declining trend due to near-term macroeconomic challenges, the stock will bounce back once these headwinds subside. EPAM has been rapidly expanding in the emerging AI space through partnerships and acquisitions, which might offer EPAM renewed growth\nAdditionally, the stock seems to be slightly stretched on the valuation front as depicted by the Zacks Value Score of C. Therefore, it is prudent for investors to wait for a favorable entry point. EPAM stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.\nWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report\nMicrosoft Corporation (MSFT) : Free Stock Analysis Report\nSalesforce Inc. (CRM) : Free Stock Analysis Report\nEPAM Systems, Inc. (EPAM) : Free Stock Analysis Report\nIQVIA Holdings Inc. (IQV) : Free Stock Analysis Report\nTo read this article on Zacks.com click here.\nZacks Investment Research","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"Company Corporation","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2474409166"}