EPAM Systems: Strong Buy On Accelerating Top Line Growth

2025-01-19 17:12:18 ET

Summary

• IT outsourcing is a strong investment theme due to the rise of remote work and companies placing IT expenses under greater scrutiny.
• EPAM Systems' Q3 earnings report showed a significant EPS beat and a return to revenue growth.
• Cash flows from operations increased significantly, and the company holds a substantial cash reserve which can be used for share buybacks.
• There is a multi-year runway for accelerating revenue growth tied to AI work.

One of my favorite investment themes for the next few years is that of the information technology ("IT") outsourcing companies.

I believe that recent developments, such as the pandemic-driven disruption to the economy and the ensuing rise of remote work, have made it far more practical for tech jobs to move overseas. While there is certainly some drive for return to office and more traditional work paradigms at the moment, a lot of the remote and hybrid work structure is here to stay....

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