How Low Can EPAM Really Go In A Market Crash

How Low Can EPAM Really Go In A Market Crash?

To accurately assess risk, investors must look at how an asset behaves when the system breaks. In the 11 major market dislocations since it began trading, EPAM Systems (EPAM) has averaged a -23% contraction, compared to the S&P 500's -13% drop.

If you are an investor in EPAM stock, you might be asking: if the macroeconomic environment fractures, how far can this stock actually fall?

One of the ways to understand this is to simply see how the stock has performed during past market crashes.

How Does It Handle Sovereign & Geopolitical Risk?

2025 US Tariff Shock (Feb 2025 to Jun 2025)

• The Trump administration announced 145% tariffs on Chinese imports on April 2, 2025, representing the most aggressive trade action since the 1930s.
• Equities and the dollar fell simultaneously, signaling lost confidence. Supply chain disruptions and small-cap input inflation drove broad declines, affecting nearly all sectors.

EPAM stock experienced -44% drawdown during this event, compared to -19% for the S&P and -3.8% for bonds.

What Happens During Credit & Liquidity Crises?

2023 SVB Regional Banking Crisis (Feb 2023 to Jul 2023)

• SVB's long-duration Treasury portfolio was destroyed by rising rates. A March 8, 2023 loss disclosure triggered an instantaneous bank run accelerated by social media.
• The FDIC seized SVB, Signature, and First Republic. Contagion was contained through deposit backstops and the Fed's Bank Term Funding Program emergency liquidity.

EPAM stock saw -43% drawdown vs -6.7% for the S&P and -4.3% for bonds.

How It Fares During Growth & Demand Scare?

2020 COVID-19 Crash (Feb 2020 to Apr 2020)

• A novel coronavirus triggered pandemic fears. Italy's healthcare collapse and a March 2020 Saudi-Russia oil price war signaled uncontainable disruption.
• Governments shut economies, triggering the fastest bear market in history. Unlimited QE and $2.2T fiscal stimulus drove a V-shaped recovery following vaccine development.

The drawdown for EPAM stood at -33% compared to -34% for the S&P and -0.7% for bonds.

Past Market Shock Drawdowns Summarized For EPAM

[1] 2013 Taper Tantrum: Bernanke's taper hint spiked Treasury yields, triggering emerging market capital flight.
[2] 2014-2016 Oil Price Collapse: OPEC refused to cut output, crashing crude from $100 to $26.
[3] 2015-2016 China Devaluation / Global Growth Scare: Yuan devaluation sparked global recession fears, crushing cyclicals and emerging markets.
[4] 2016-2017 Trump Reflation Bond Selloff: Trump's election spurred fiscal stimulus hopes, rotating capital from bonds into cyclicals.
[5] Q4 2018 Fed Policy Error / Growth Scare: Powell's hawkish comments and trade war fears triggered the worst December since 1931.
[6] 2020 COVID-19 Crash: Pandemic lockdowns caused history's fastest bear market before massive stimulus drove recovery.
[7] 2022 Inflation Shock & Fed Tightening: 9.1% CPI forced aggressive rate hikes, crushing both stocks and bonds simultaneously.
[8] 2023 SVB Regional Banking Crisis: SVB's rate-driven bond losses triggered a social-media bank run, seized by FDIC.
[9] Summer-Fall 2023 Five Percent Yield Shock: Strong economic data pushed 10-year yields to 5%, compressing yield-sensitive sector valuations.
[10] 2024 Yen Carry Trade Unwind: BOJ rate hike unwound yen carry trades, briefly crashing tech stocks globally.
[11] 2025 US Tariff Shock: 145% China tariffs crashed equities and the dollar on supply chain disruption fears.

So What Can You Do For Your Investments?

While the headline panic over macroeconomic shocks can be deafening, letting fear dictate your trades leaves your portfolio highly exposed. Drawdowns of this magnitude are embedded in EPAM's historical profile. If the thesis for owning the business remains intact, a steep contraction during a Sovereign & Geopolitical Risk environment should be viewed as the baseline expectation, not a fundamental failure.

This is where rule-based portfolio investment approach, such as Trefis High Quality Portfolio (HQ) makes a difference. It allows you to stay invested when markets are fearful and volatile by dampening the risk. HQ has returned > 105% since inception.