Stock of the Day

September 6, 2021

Infosys (INFY)

$18.20
+$0.27 (+1.5%)
Market Cap: $75.41B

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.

Infosys Bull Case

Here are some ways that investors could benefit from investing in Infosys Limited:

  • The current stock price is around $18.47, which may present a buying opportunity for investors looking for value in the technology sector.
  • Infosys Limited reported a net margin of over 17%, indicating strong profitability, which can be attractive for investors seeking companies with solid financial health.
  • The company has a return on equity of 31.60%, suggesting effective management and the ability to generate profits from shareholders' equity, a key metric for assessing company performance.
  • Recent earnings results showed an EPS of $0.20, surpassing expectations, which can boost investor confidence in the company's growth potential.
  • With institutional investors holding 16.20% of the stock, there is a level of confidence from larger investors, which can be a positive signal for retail investors.

Infosys Bear Case

Investors should be bearish about investing in Infosys Limited for these reasons:

  • The stock has experienced a decline from its 52-week high of $23.63, which may indicate potential volatility and risk for investors.
  • Analysts have mixed ratings, with some firms downgrading their price targets, which could suggest uncertainty about the company's future performance.
  • The price-to-earnings (PE) ratio of 23.37 may be considered high compared to industry averages, indicating that the stock could be overvalued.
  • Recent revenue figures fell short of analysts' expectations, which could raise concerns about the company's growth trajectory.
  • With a beta of 0.98, the stock is nearly as volatile as the market, which may not appeal to risk-averse investors looking for stability.
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