Piper Sandler Reiterates Overweight Rating on EPAM Systems (EPAM)

Piper Sandler analyst Arvind Ramnani reiterated an Overweight rating and $225.00 price target on EPAM Systems (NYSE: EPAM).

The analyst commented, "We examined M&A activity in IT Services over the past 20+ years (see table on page-3); and in that context evaluated EPAM's acquisition of NEORIS. The punchline is that we don't view this acquisition positively due to its large size, industry exposure, and customer concentration (Cemex is +20% of NEORIS' revenues). While it's the 4th largest in absolute transaction value, it's even larger relative to EPAM's revenue base: ~7% of revenue. In IT Services, successful acquisitions have typically been tuck-in acquisitions/ smaller in scale that are easier to integrate and thereby limit downside risk. While we don't have perfect data, anecdotally, many of the large-scale acquisitions in the space have faced integration challenges. Finally, EPAM has limited experience with large scale integrations. In our view, EPAM would have been better served acquiring a series of smaller targets, which has been a successful recipe for the most active dealmakers: Accenture and Globant."

For an analyst ratings summary and ratings history on EPAM Systems click here. For more ratings news on EPAM Systems click here.

Shares of EPAM Systems closed at $198.63 yesterday.

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