NEW YORK (TheStreet) -- Shares of Infosys (INFY) - Get Report gained 5.7% to close at $19.08 on Wednesday after the system software company announced a new partnership with General Electric (GE) - Get Report to develop new Internet of Things solutions.
The companies will collaborate to develop solutions that are designed to help manufacturers and other industrial enterprises improve asset efficiency and build more intelligent links between design, production, and field testing.
The Industrial Internet Consortium, a body of industries, governments, and academics focused on the best practices for the Industrial Internet, recently approved two Infosys-led testbeds that will be used in the collaboration.
Infosys' Asset Efficiency Testbed enables holistic monitoring, analysis, and optimization of critical infrastructure assets. The Industrial Digital Thread Testbed creates more intelligent linkages between the three phases of manufacturing: design, production and field testing/service.
About 9.5 million shares of Infosys were traded in regular trading hours on Wednesday, above the company's average trading volume of about 4.1 million shares a day.
TheStreet Ratings team rates INFOSYS LTD as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
We rate INFOSYS LTD (INFY) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, notable return on equity and solid stock price performance. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 21.6%. Since the same quarter one year prior, revenues slightly increased by 5.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- INFY has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.23, which clearly demonstrates the ability to cover short-term cash needs.
- INFOSYS LTD reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, INFOSYS LTD increased its bottom line by earning $0.88 versus $0.77 in the prior year. This year, the market expects an improvement in earnings ($0.89 versus $0.88).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the IT Services industry and the overall market on the basis of return on equity, INFOSYS LTD has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full analysis from the report here: INFY