The Russia-Ukraine conflict is absolutely terrible, from so many different angles. There’s the obvious humanitarian concern that most have for what’s going on in Eastern Europe. Additionally, financial markets are seeing incredible volatility, as investors digest what the impact will be for specific companies. Today, EPAM Systems (NYSE:EPAM) is one company that’s feeling the direct impacts of the Russian invasion. Indeed, EPAM stock has lost 45% of its value in a single day, at the time of writing.
Such a move would normally be out of the question for this digital transformation services and product engineering company. EPAM stock has otherwise been on a tear in recent years. This tech-focused company is one that’s produced impressive growth, driven by emerging markets, among other secular catalysts.
Unfortunately for EPAM investors, this company did have significant exposure to Russia. Accordingly, EPAM is the latest in a string of countries to revise its forward outlook.
Let’s dive into what investors are watching with this company right now.
EPAM Stock Plummets on Withdrawal of Forward Guidance
Today, EPAM Systems announced the company would be withdrawing its Q1 and fiscal year 2022 guidance. This move is in direct response to the ongoing Russian invasion of Ukraine.
The company reported that “heightened uncertainties and regional impacts resulting from military actions in Ukraine” were the cause for this move. Accordingly, investors in EPAM stock appear to be getting their calculators out to see what their direct exposure is.
Reportedly, EPAM generated approximately 5% of its total revenue from Russia in Q3 of last year. Most of this revenue was generated via financial services in Russia, which have been disrupted significantly. Therefore, with the markets taking a very bearish view on any company with significant exposure to Russian finance, EPAM stock has been hit hard on this news.
Now, a 45% drop for a company that reportedly generated only 5% of its total revenue from Russia may seem steep. Indeed, perhaps this selloff is overdone. However, for now, investors are clearly fleeing stocks with Russia-related risks for safe havens. Until this situation settles down, EPAM stock is likely to remain a volatile one from here.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
