Shares are spiking 2.37% to $16.64 on Tuesday as analysts expect the company to report a year-over-year growth in revenue. Profits, however, are projected to come in lower than last year's third quarter.
Based in India, Infosys, together with its subsidiaries, provides business consulting, technology, engineering, and outsourcing services in North America, Europe, India and elsewhere.
For the latest quarter, Wall Street is expecting the company to earn 23 cents a share on revenue of $2.37 billion.
During the same quarter the year prior, the company earned 81 cents a share on revenue of $2.1 billion.
Separately, India's export-driven IT outsourcing firms may increase client fees and process more work from their centers in India to counter the impact of a rise in fees for work visas in the U.S., Reuters reports.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate INFOSYS LTD as a Buy with a ratings score of A-. 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, solid stock price performance and expanding profit margins. 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 greatly exceeded the industry average of 26.9%. Since the same quarter one year prior, revenues slightly increased by 8.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the 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 3.37, which clearly demonstrates the ability to cover short-term cash needs.
- Compared to where it was trading a year ago, INFY's share price has not changed very much due to (a) the relatively weak year-over-year performance of the overall market, (b) the company's stagnant earnings, and (c) other mixed results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- 40.07% is the gross profit margin for INFOSYS LTD which we consider to be strong. Regardless of INFY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, INFY's net profit margin of 21.70% compares favorably to the industry average.
- You can view the full analysis from the report here: INFY