Ending the month on an auspicious note, EPAM Systems (EPAM +1.83%) stock soared through the last week of July. With an analyst taking a more bullish stance on the software stock and the company reporting a new artificial intelligence (AI) collaboration, investors found plenty of reasons to pick up shares.
According to data provided by S&P Global Market Intelligence, shares of EPAM Systems rose 17.5% from the end of trading on July 24 through the close of yesterday's market session.
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Investors respond bullishly to a firm's new view
Maintaining a neutral rating, Citigroup lowered its price target on EPAM Systems stock to $100 from $112 on Monday. While the more tempered view of the stock's prospects seemed negative on the surface, investors interpreted the reduced price target as a glass-half-full view.
NYSE: EPAM
Key Data Points
Shares of EPAM Systems closed at $89.85 before the weekend, implying upside of over 11% from the new price target.
The second catalyst for the stock's rise came on Wednesday, when EPAM Systems announced it had joined the OpenAI Partner Network as an Advanced Partner. As one of the newest members of the network, EPAM Systems will assist enterprises worldwide in deploying safer, more scalable AI solutions.
EPAM Systems projects that it will "develop specialized forward-deployed engineer training globally, certifying more than 5,000 consultants with 10,000+ credentials in the first year" of its partnership with OpenAI.
Is it too late to buy EPAM Systems stock after the recent rise?
While the new Citigroup price target and the deal with OpenAI may prompt some to act, investors would be better served by conducting their own due diligence and thoroughly investigating the company on its merits. Consistently profitable and free cash flow-generating, EPAM Systems offers a more conservative route to gaining AI stock exposure. And with shares trading at 15.2 times trailing earnings, a deep discount to their five-year average P/E of 18.9, investors have a great opportunity to pick up shares while they're sitting in the bargain bin.
