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EPAM Shares Continue to Fall on Ukraine Crisis & Russia Exit
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EPAM Systems’ (EPAM - Free Report) shares closed in the red on Mar 4 due to escalating Russia-Ukraine crisis and the company’s decision to shut down operations in Russia. It is worth mentioning that after months of growing tensions between the two countries, Russia invaded Ukraine on Feb 21.
Since then, the stock has plunged 55.2% on growing concerns over business disruptions amid the ongoing war between Russia and Ukraine.
EPAM recently announced that it will discontinue its services in Russia in support of Ukraine. The company’s move is consistent with the US government’s Mar 24 announcement of cutting off direct technological export to Russia as part of a series of economic and financial sanctions imposed on the country for initiating military attack on Ukraine.
EPAM has significant exposure in the region with majority of its delivery centers located in Central and Eastern Europe (“CEE”). In fact, the company’s largest delivery centers are located in Belarus, Russia and Ukraine. It has approximately 9,000 and 14,000 employees in Russia and Ukraine, respectively.
Per EPAM’s management, the company will offer a $100 million humanitarian aid to the Ukrainian employees and their families. The company stated that it is in full support of all the sanctions. It also declared that it is evaluating other operations in the region.
EPAM stated that it will offer transition support to its existing Russian customer base. In the latest quarterly report, revenues from CEE were $55 million (accounting for 5% of total revenues).
In fiscal 2021, EPAM generated $168 million of revenues from CEE. Escalation in the ongoing conflict is likely to hurt the company’s revenues and profitability.
Besides, EPAM’s market share and revenues depend on client relationships and the number of contracts it secures. This, along with the limited scope for product differentiation, makes renegotiation of large contracts extremely important. As a result, competition from companies like Accenture and Infosys is a constant pressure.
Also, tough competition from regions like Europe might increase pricing pressure for EPAM.
The Zacks Consensus Estimate for AMD’s first-quarter fiscal 2022 earnings has been revised upward by 23 cents to 91 cents per share over the past 60 days. For fiscal 2022, earnings estimates have moved south by 2 cents to $3.99 per share in the past 30 days.
AMD’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 17%. Shares of AMD have gained 42.8% in the past year.
The Zacks Consensus Estimate for Axcelis’ first-quarter 2022 earnings has been revised a couple of cents upward to 89 cents per share over the past 30 days. For 2022, earnings estimates have moved north by 12.4% to $3.99 per share in the past 30 days.
Axcelis’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 30.3%. Shares of ACLS have rallied 85.9% in the past year.
The Zacks Consensus Estimate for Apple’s second-quarter fiscal 2022 earnings has been revised upward by 5.1% to $1.43 per share over the past 60 days. For fiscal 2022, earnings estimates have moved a penny north to $6.16 per share in the past seven days.
Apple’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 20.3%. AAPL stock has appreciated 36.8% in the past year.
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EPAM Shares Continue to Fall on Ukraine Crisis & Russia Exit
EPAM Systems’ (EPAM - Free Report) shares closed in the red on Mar 4 due to escalating Russia-Ukraine crisis and the company’s decision to shut down operations in Russia. It is worth mentioning that after months of growing tensions between the two countries, Russia invaded Ukraine on Feb 21.
Since then, the stock has plunged 55.2% on growing concerns over business disruptions amid the ongoing war between Russia and Ukraine.
EPAM recently announced that it will discontinue its services in Russia in support of Ukraine. The company’s move is consistent with the US government’s Mar 24 announcement of cutting off direct technological export to Russia as part of a series of economic and financial sanctions imposed on the country for initiating military attack on Ukraine.
EPAM has significant exposure in the region with majority of its delivery centers located in Central and Eastern Europe (“CEE”). In fact, the company’s largest delivery centers are located in Belarus, Russia and Ukraine. It has approximately 9,000 and 14,000 employees in Russia and Ukraine, respectively.
EPAM Systems, Inc. Price and Consensus
EPAM Systems, Inc. price-consensus-chart | EPAM Systems, Inc. Quote
Per EPAM’s management, the company will offer a $100 million humanitarian aid to the Ukrainian employees and their families. The company stated that it is in full support of all the sanctions. It also declared that it is evaluating other operations in the region.
EPAM stated that it will offer transition support to its existing Russian customer base. In the latest quarterly report, revenues from CEE were $55 million (accounting for 5% of total revenues).
In fiscal 2021, EPAM generated $168 million of revenues from CEE. Escalation in the ongoing conflict is likely to hurt the company’s revenues and profitability.
Besides, EPAM’s market share and revenues depend on client relationships and the number of contracts it secures. This, along with the limited scope for product differentiation, makes renegotiation of large contracts extremely important. As a result, competition from companies like Accenture and Infosys is a constant pressure.
Also, tough competition from regions like Europe might increase pricing pressure for EPAM.
Zacks Rank & Key Picks
EPAM currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader computer and technology sector are Advanced Micro Devices (AMD - Free Report) and Axcelis Technologies (ACLS - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and the iPhone maker Apple (AAPL - Free Report) carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AMD’s first-quarter fiscal 2022 earnings has been revised upward by 23 cents to 91 cents per share over the past 60 days. For fiscal 2022, earnings estimates have moved south by 2 cents to $3.99 per share in the past 30 days.
AMD’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 17%. Shares of AMD have gained 42.8% in the past year.
The Zacks Consensus Estimate for Axcelis’ first-quarter 2022 earnings has been revised a couple of cents upward to 89 cents per share over the past 30 days. For 2022, earnings estimates have moved north by 12.4% to $3.99 per share in the past 30 days.
Axcelis’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 30.3%. Shares of ACLS have rallied 85.9% in the past year.
The Zacks Consensus Estimate for Apple’s second-quarter fiscal 2022 earnings has been revised upward by 5.1% to $1.43 per share over the past 60 days. For fiscal 2022, earnings estimates have moved a penny north to $6.16 per share in the past seven days.
Apple’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 20.3%. AAPL stock has appreciated 36.8% in the past year.