One-glance verdict
Undervalued
$14.42 our estimate vs market $7.79
Wall Street consensus: $9.40 (-34.8% lower than our fair-value estimate)
46% below our estimate, below the bear case
Fundamentals snapshot
Grid Dynamics Holdings, Inc.
GDYN · NCM · Technology · Information Technology Services
Current price
$7.79
52-week range
$5.11 - $10.21
Market cap
$631.98M
Balance sheet
Healthy
-0.09x Concerning
Net cash $281.72M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
0 Risks
3 rewards · 0 risks
- Reward Revenue grew 2.6% last year.
- Reward Returns 0.5% on equity, ahead of 20% of its peers.
- Reward Free cash flow was positive in 8/10 years.
What this company does
Grid Dynamics Holdings, Inc.
Grid Dynamics Holdings sells artificial intelligence and digital transformation services to large companies across various industries like retail and finance, helping them use AI to improve their operations. Their main source of money comes from these services, and it matters because it shows how successful they are at helping clients modernize and adopt new technologies.
How the company got here
Founded in 2006, Grid Dynamics started by providing specialized software engineering for large retail and technology companies. It built a reputation for tackling complex technical challenges, like cloud computing and big data, for major corporations. A key turning point was in 2020 when it became a publicly traded company on the NASDAQ stock exchange, which provided more capital (money for growth and operations). Since then, the company has grown by acquiring smaller, specialized tech firms to expand its expertise in areas like banking, manufacturing, and artificial intelligence.
What it actually does
Think of Grid Dynamics as a team of expert builders for the digital world. Companies hire them to design, build, and modernize the complex software and technology that runs their businesses, like an e-commerce website or a company's internal data systems. They specialize in using advanced technologies like artificial intelligence (AI) to make businesses more efficient and improve how customers interact with them online. For example, they might help a retail company build a smarter search function on its website or help a manufacturer use data to predict when machinery needs maintenance.
Digital Engineering Services
This is the company's core business, where they provide custom technology consulting and software development for large companies. Clients in industries like retail, finance, and manufacturing pay Grid Dynamics to help them with their 'digital transformation' (the process of updating their technology and business practices for the modern era). This can involve moving their systems to the cloud (using remote servers hosted on the internet instead of their own), building new customer-facing applications, or modernizing their existing software to be more efficient. This segment forms the bulk of the company's business, as they work as long-term engineering partners for their clients.
Artificial Intelligence (AI) Services
A large and rapidly growing part of their business involves helping companies use Artificial Intelligence. This isn't about building robots from science fiction; it's about creating smart software that can automate tasks, analyze data, and help businesses make better decisions. For instance, they might create an AI system for a bank to detect fraudulent transactions or for a retail company to personalize recommendations for shoppers. This area is a major focus for the company and already makes up a significant portion of their revenue (the total money they bring in from sales).
What management is betting on now
The company's leadership is heavily focused on expanding its Artificial Intelligence services, seeing it as a major source of future growth. They are also working to attract a wider variety of clients across different industries, such as financial services and manufacturing, to reduce their reliance on any single sector. Another key priority is growing their global team of engineers to be able to take on more projects and provide support to clients around the clock. Management's goal is to become a go-to strategic partner for large companies looking to use advanced technology to solve their most complex business problems.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$5.93M
FY2024 Q4
$4.43M
FY2025 Q1
$6.01M
FY2025 Q2
$10.21M
FY2025 Q3
$2.95M
FY2025 Q4
$6.10M
FY2026 Q1
$4.43M
FY2026 Q2
$2.52M
Revenue
$108.16M
Net income
$2.85M
Diluted EPS
0.03
Operating cash flow
$6.10M
Free cash flow
$2.52M
Fetching…
Sources
Revenue
$104.10M
Net income
$-1.47M
Diluted EPS
-0.02
Operating cash flow
$8.39M
Free cash flow
$4.43M
Fetching…
Sources
Revenue
$106.15M
Net income
$306.00K
Diluted EPS
0.01
Operating cash flow
$9.90M
Free cash flow
$6.10M
Fetching…
Sources
Revenue
$104.16M
Net income
$1.18M
Diluted EPS
0.01
Operating cash flow
$6.97M
Free cash flow
$2.95M
Fetching…
Sources
Revenue
$101.09M
Net income
$5.27M
Diluted EPS
0.06
Operating cash flow
$14.38M
Free cash flow
$10.21M
Fetching…
Sources
Revenue
$100.42M
Net income
$2.91M
Diluted EPS
0.03
Operating cash flow
$9.35M
Free cash flow
$6.01M
Fetching…
Sources
Revenue
$100.28M
Net income
$4.52M
Diluted EPS
0.06
Operating cash flow
$7.07M
Free cash flow
$4.43M
Fetching…
Sources
Revenue
$87.44M
Net income
$4.28M
Diluted EPS
0.05
Operating cash flow
$9.21M
Free cash flow
$5.93M
Fetching…
Sources
Is it cheap or expensive?
Fair value $14.42 vs current price $7.79
Wall Street consensus is the average analyst price target: $9.40 (-34.8% lower than our fair-value estimate).
Our most-likely fair value is $14.42 a share — about 85.1% above today's price of $7.79, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $281.7M - more cash than debt. Interest coverage -0.1x.
Net debt
$-281.72M
Interest coverage
-0.09x
Grid Dynamics Holdings, Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here.
Healthy
Worse cushion
Baseline
Better cushion
GDYN
BASELINE
Grid Dynamics Holdings, Inc.
Total debt $16.71M Interest coverage -0.09x This is the baseline the peer rows are being compared against.
Total debt $517.85M Interest coverage 6.18x This peer still has a real interest-payment cushion, while GDYN does not.
Total debt $143.33M Interest coverage 4.59x This peer still has a real interest-payment cushion, while GDYN does not.
Total debt $83.03M Interest coverage 15.53x This peer still has a real interest-payment cushion, while GDYN does not.
Total debt $317.76M Interest coverage 2.95x This peer still has a real interest-payment cushion, while GDYN does not.
What you should know
The case for and against GDYN
3 Rewards
0 Risks
Rewards
-
Revenue grew 2.6% last year.
-
Returns 0.5% on equity, ahead of 20% of its peers.
-
Free cash flow was positive in 8/10 years.
Risks
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
259.67x
Forward P/E
14.85x
P/B
1.21x
P/S
1.50x
EV/EBITDA
13.29x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
34.7%
Operating margin
3.6%
Net margin
0.7%
ROE
0.5%
ROA
0.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.03x
Current ratio
7.22x
Quick ratio
6.93x
Total debt
$16.71M
Total cash
$298.43M
Growth
How the business has been compounding
Revenue TTM
$422.58M
Revenue 5Y CAGR
18.2%
EPS TTM
0.03
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$31.36M
Free CF TTM
$25.27M
FCF margin
6.0%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
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