Infosys (NYSE:INFY) Issues Earnings Results, Misses Expectations By $0.01 EPS

Infosys (NYSE:INFY) issued its earnings results on Thursday. The technology company reported $0.20 earnings per share for the quarter, missing the consensus estimate of $0.21 by ($0.01), Zacks reports. Infosys had a return on equity of 32.64% and a net margin of 16.44%.

Here are the key takeaways from Infosys’ conference call:

• Infosys announced that Ashiss Dash will succeed Salil Parekh as CEO, with a transition period over the next several months. Management emphasized Dash’s long tenure, internal experience, and continuity with the company’s culture and strategy.
• Q1 constant-currency revenue growth was 2.4% year over year and 1% sequentially, but results were held back by softer volumes, weaker pricing, and a one-time client termination. The company also revised FY2027 revenue guidance down to 1.5%-3% from prior expectations.
• Infosys highlighted continued strength in AI services, which reached 8.2% of revenue and has been growing at a double-digit sequential rate. Management said AI work is broadening across the six areas of its strategy and is becoming a key long-term growth engine.
• The company posted strong profitability and cash generation, with operating margin at 21.1% and free cash flow of $955 million. Infosys also reiterated margin guidance of 20%-22% for the year.
• Large deal momentum remained solid, with $3.6 billion of large deal wins and 61% net new in the quarter. Management pointed to vendor consolidation opportunities and healthy AI-led transformation demand as support for the pipeline.

Infosys Stock Performance

Shares of NYSE INFY traded down $0.30 during mid-day trading on Thursday, hitting $10.62. 20,702,442 shares of the stock traded hands, compared to its average volume of 18,544,795. The stock has a fifty day moving average price of $11.66 and a 200-day moving average price of $13.78. Infosys has a 52 week low of $10.30 and a 52 week high of $30.00. The company has a market cap of $43.00 billion, a price-to-earnings ratio of 13.28, a PEG ratio of 1.46 and a beta of 0.90.

Analyst Ratings Changes

INFY has been the subject of several research reports. Susquehanna reduced their price objective on Infosys from $14.00 to $12.00 and set a “neutral” rating for the company in a report on Friday, July 10th. Weiss Ratings reaffirmed a “hold (c-)” rating on shares of Infosys in a research note on Monday, June 8th. JPMorgan Chase & Co. decreased their price objective on shares of Infosys from $16.80 to $12.70 and set an “overweight” rating on the stock in a research report on Wednesday, June 24th. TD Cowen cut their target price on shares of Infosys from $13.00 to $10.00 and set a “hold” rating for the company in a research report on Thursday, July 9th. Finally, Stifel Nicolaus set a $13.00 price target on shares of Infosys and gave the company a “hold” rating in a research report on Thursday, July 16th. One equities research analyst has rated the stock with a Buy rating, seven have assigned a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat.com, the company has a consensus rating of “Hold” and a consensus target price of $12.50.

Hedge Funds Weigh In On Infosys

Hedge funds have recently added to or reduced their stakes in the company. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. raised its holdings in Infosys by 6.4% in the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 63,155 shares of the technology company’s stock valued at $1,153,000 after acquiring an additional 3,804 shares in the last quarter. Dynamic Technology Lab Private Ltd bought a new position in shares of Infosys during the first quarter worth about $239,000. Finally, NewEdge Advisors LLC grew its stake in Infosys by 79.9% in the first quarter. NewEdge Advisors LLC now owns 54,978 shares of the technology company’s stock worth $1,003,000 after purchasing an additional 24,426 shares in the last quarter. 16.20% of the stock is currently owned by hedge funds and other institutional investors.

Infosys Company Profile

Infosys Ltd. is a digital services and consulting company, which engages in the provision of end-to-end business solutions. It operates through the following segments: Financial Services, Retail, Communication, Energy, Utilities, Resources, and Services, Manufacturing, Hi-Tech, Life Sciences, and All Other. The company was founded by Dinesh Krishnan Swamy, Senapathy Gopalakrishnan, Narayana Ramarao Nagavara Murthy, Raghavan N. S., Ashok Arora, Nandan M. Nilekani, and S. D. Shibulal on July 2, 1981 and is headquartered in Bangalore, India.