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

Infosys (NYSE:INFY) released its quarterly earnings results on Thursday. The technology company reported $0.20 earnings per share for the quarter, missing analysts’ consensus estimates of $0.21 by ($0.01), Zacks reports. The firm had revenue of $4.99 billion during the quarter, compared to analyst estimates of $5.09 billion. 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 Price Performance

Shares of INFY opened at $10.71 on Friday. Infosys has a 1-year low of $10.30 and a 1-year high of $30.00. The stock has a market cap of $43.32 billion, a price-to-earnings ratio of 13.38, a price-to-earnings-growth ratio of 1.43 and a beta of 0.90. The firm has a 50 day simple moving average of $11.64 and a 200-day simple moving average of $13.73.

Institutional Investors Weigh In On Infosys

A number of large investors have recently bought and sold shares of the stock. Dynamic Technology Lab Private Ltd purchased a new stake in shares of Infosys in the first quarter valued at $239,000. NewEdge Advisors LLC increased its position in Infosys by 79.9% during the 1st 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. Finally, MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. raised its stake in Infosys by 6.4% in the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 63,155 shares of the technology company’s stock valued at $1,153,000 after purchasing an additional 3,804 shares during the last quarter. Institutional investors and hedge funds own 16.20% of the company’s stock.

More Infosys News

Here are the key news stories impacting Infosys this week:

• Positive Sentiment: Infosys said AI revenues reached 8.2% of sales in Q1, showing continued traction in higher-growth services. Infosys: AI Revenues at 8.2% in Q1; Resilient Operating Margin of 21.1%
• Positive Sentiment: The company highlighted $3.6 billion in large deal wins, with 61% net new, and strong free cash flow of $0.96 billion, which supports the investment case. Infosys: AI Revenues at 8.2% in Q1; Resilient Operating Margin of 21.1%

Analyst Upgrades and Downgrades

Several brokerages recently issued reports on INFY. BMO Capital Markets reduced their price objective on Infosys from $20.00 to $15.00 and set a “market perform” rating for the company in a report on Friday, April 24th. Weiss Ratings reissued a “hold (c-)” rating on shares of Infosys in a report on Monday, June 8th. JPMorgan Chase & Co. restated a “neutral” rating and issued a $10.90 price target (down from $12.70) on shares of Infosys in a research report on Friday. TD Cowen cut their price target on Infosys from $13.00 to $10.00 and set a “hold” rating for the company in a research note on Thursday, July 9th. Finally, Stifel Nicolaus set a $13.00 price objective on shares of Infosys and gave the stock a “hold” rating in a research report on Thursday, July 16th. Eight analysts have rated the stock with a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat.com, the company has a consensus rating of “Reduce” and a consensus price target of $12.19.

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.