Infosys (NYSE:INFY) Shares Gap Down on Disappointing Earnings

Shares of Infosys Ltd. (NYSE:INFY) gapped down before the market opened on Friday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $13.22, but opened at $12.61. Infosys shares last traded at $12.5840, with a volume of 16,169,072 shares.

The technology company reported $0.20 earnings per share for the quarter, missing the consensus estimate of $0.21 by ($0.01). Infosys had a net margin of 16.38% and a return on equity of 33.91%.

Infosys News Roundup

Here are the key news stories impacting Infosys this week:

• Positive Sentiment: Infosys reported $5.2 billion in large-deal total contract value during the quarter, with 62% representing net-new business. The company also said AI-related revenue increased 29% sequentially, supporting its longer-term growth strategy. Infosys AI strategy and Q2 results
• Positive Sentiment: Q2 revenue reached $5.145 billion, up 1.5% year over year and 1.2% sequentially in constant currency. Operating margin remained stable at 21%, within the company’s 20%-22% target range. Infosys quarterly performance
• Neutral Sentiment: Infosys issued FY2027 revenue guidance of $20.4 billion to $20.6 billion, compared with a consensus estimate of $20.4 billion. It retained its operating-margin guidance of 20%-22%, but the forecast implies only 1%-2% revenue growth, limiting near-term upside expectations.
• Negative Sentiment: Quarterly EPS was $0.20, below the $0.21 consensus estimate, while reports highlighted a decline in net profit despite revenue growth. The earnings miss and reduced annual growth outlook were the primary reasons investors questioned whether the AI revenue acceleration can offset broader profitability and demand concerns. Why Infosys AI growth did not offset earnings concerns

Analyst Ratings Changes

INFY has been the subject of a number of recent analyst reports. CLSA lowered shares of Infosys from an “outperform” rating to a “hold” rating in a research report on Wednesday, August 19th. Jefferies Financial Group restated a “hold” rating and set a $14.31 price target (down from $20.82) on shares of Infosys in a research report on Monday, August 31st. BMO Capital Markets reiterated a “market perform” rating and issued a $12.00 price objective (down from $13.00) on shares of Infosys in a report on Friday, July 24th. Wells Fargo & Company set a $11.00 price objective on shares of Infosys and gave the company an “equal weight” rating in a research note on Friday, June 26th. Finally, HSBC set a $11.47 target price on Infosys and gave the stock a “hold” rating in a report on Friday, July 24th. Ten investment analysts have rated the stock with a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat, Infosys has an average rating of “Reduce” and a consensus target price of $11.45.

Institutional Inflows and Outflows

Hedge funds have recently bought and sold shares of the company. Nisa Investment Advisors LLC raised its position in Infosys by 87.1% in the third quarter. Nisa Investment Advisors LLC now owns 3,683 shares of the technology company’s stock worth $40,000 after acquiring an additional 1,715 shares in the last quarter. V Square Quantitative Management LLC bought a new position in shares of Infosys during the 1st quarter valued at about $97,000. TD Waterhouse Canada Inc. grew its stake in shares of Infosys by 14.2% in the 2nd quarter. TD Waterhouse Canada Inc. now owns 9,090 shares of the technology company’s stock worth $97,000 after purchasing an additional 1,131 shares during the last quarter. State of Wyoming acquired a new position in shares of Infosys in the 1st quarter worth approximately $134,000. Finally, Aureus Asset Management LLC acquired a new position in shares of Infosys in the 1st quarter worth approximately $142,000. 16.20% of the stock is owned by institutional investors and hedge funds.

Infosys Trading Down 4.8%

The business’s fifty day moving average is $11.45 and its 200 day moving average is $11.93. The firm has a market capitalization of $50.99 billion, a P/E ratio of 15.52, a P/E/G ratio of 2.97 and a beta of 0.88.

About Infosys

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.