EPAM Systems, Inc.
Thesis
EPAM is expected to outperform street estimates due to its strong pipeline and demand for services, which is currently outpacing supply. The company has a solid asset-light operating profile, high cash generation, and a large cash balance that provides insulation from market dislocations. The projected exit price is $430, with an IRR of 24%.
Did it work?
The long thesis projected EPAM reaching an exit price of $430 with a 24% IRR on the back of strong demand and pipeline, but the stock is down 40.3% after 76 months — far more than any reasonable stated horizon. The price moved decisively in the opposite direction of the thesis, indicating the anticipated demand strength and estimate outperformance did not translate into shareholder returns. With over six years elapsed and a deeply negative return, the thesis is clearly broken.