INFOSYS LTD-SP ADR (INFY) Stock Fundamental Analysis
NYSE:INFY - New York Stock Exchange, Inc. - US4567881085 - ADR - Currency: USD
INFY gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 81 industry peers in the IT Services industry. INFY scores excellent points on both the profitability and health parts. This is a solid base for a good stock. INFY has a correct valuation and a medium growth rate. These ratings could make INFY a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
INFY had positive earnings in the past year.
In the past year INFY had a positive cash flow from operations.
In the past 5 years INFY has always been profitable.
In the past 5 years INFY always reported a positive cash flow from operatings.
1.2 Ratios
INFY has a better Return On Assets (17.94%) than 97.53% of its industry peers.
INFY has a Return On Equity of 27.88%. This is amongst the best in the industry. INFY outperforms 90.12% of its industry peers.
With an excellent Return On Invested Capital value of 23.41%, INFY belongs to the best of the industry, outperforming 96.30% of the companies in the same industry.
INFY had an Average Return On Invested Capital over the past 3 years of 24.18%. This is above the industry average of 21.85%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.94% | ||
| ROE | 27.88% | ||
| ROIC | 23.41% |
ROA(3y)18.71%
ROA(5y)18.55%
ROE(3y)29.87%
ROE(5y)28.86%
ROIC(3y)24.18%
ROIC(5y)23.55%
1.3 Margins
The Profit Margin of INFY (16.39%) is better than 93.83% of its industry peers.
INFY's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 21.15%, INFY belongs to the top of the industry, outperforming 95.06% of the companies in the same industry.
In the last couple of years the Operating Margin of INFY has remained more or less at the same level.
Looking at the Gross Margin, with a value of 30.46%, INFY is doing worse than 60.49% of the companies in the same industry.
INFY's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.15% | ||
| PM (TTM) | 16.39% | ||
| GM | 30.46% |
OM growth 3Y-3%
OM growth 5Y-0.35%
PM growth 3Y-3.39%
PM growth 5Y-2.16%
GM growth 3Y-2.23%
GM growth 5Y-1.65%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), INFY is creating value.
Compared to 1 year ago, INFY has about the same amount of shares outstanding.
The number of shares outstanding for INFY has been reduced compared to 5 years ago.
Compared to 1 year ago, INFY has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 10.56 indicates that INFY is not in any danger for bankruptcy at the moment.
INFY has a better Altman-Z score (10.56) than 93.83% of its industry peers.
The Debt to FCF ratio of INFY is 0.25, which is an excellent value as it means it would take INFY, only 0.25 years of fcf income to pay off all of its debts.
INFY has a Debt to FCF ratio of 0.25. This is amongst the best in the industry. INFY outperforms 90.12% of its industry peers.
INFY has a Debt/Equity ratio of 0.06. This is a healthy value indicating a solid balance between debt and equity.
INFY has a Debt to Equity ratio of 0.06. This is in the better half of the industry: INFY outperforms 72.84% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.25 | ||
| Altman-Z | 10.56 |
ROIC/WACC2.73
WACC8.58%
2.3 Liquidity
INFY has a Current Ratio of 2.27. This indicates that INFY is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of INFY (2.27) is better than 69.14% of its industry peers.
A Quick Ratio of 2.26 indicates that INFY has no problem at all paying its short term obligations.
With a decent Quick ratio value of 2.26, INFY is doing good in the industry, outperforming 69.14% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.27 | ||
| Quick Ratio | 2.26 |
3. Growth
3.1 Past
INFY shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 1.67%.
INFY shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.57% yearly.
INFY shows a small growth in Revenue. In the last year, the Revenue has grown by 6.07%.
The Revenue has been growing by 12.41% on average over the past years. This is quite good.
EPS 1Y (TTM)1.67%
EPS 3Y7.07%
EPS 5Y10.57%
EPS Q2Q%-11.86%
Revenue 1Y (TTM)6.07%
Revenue growth 3Y10.25%
Revenue growth 5Y12.41%
Sales Q2Q%7.92%
3.2 Future
The Earnings Per Share is expected to grow by 9.24% on average over the next years. This is quite good.
INFY is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.78% yearly.
EPS Next Y9.78%
EPS Next 2Y9.41%
EPS Next 3Y7.15%
EPS Next 5Y9.24%
Revenue Next Year3.59%
Revenue Next 2Y5.47%
Revenue Next 3Y5.57%
Revenue Next 5Y4.78%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 24.71 indicates a rather expensive valuation of INFY.
Based on the Price/Earnings ratio, INFY is valued a bit cheaper than the industry average as 60.49% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.15, INFY is valued at the same level.
With a Price/Forward Earnings ratio of 22.38, INFY is valued on the expensive side.
INFY's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 21.60. INFY is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.71 | ||
| Fwd PE | 22.38 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of INFY indicates a somewhat cheap valuation: INFY is cheaper than 61.73% of the companies listed in the same industry.
INFY's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. INFY is cheaper than 69.14% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.63 | ||
| EV/EBITDA | 15.63 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
INFY has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.53
PEG (5Y)2.34
EPS Next 2Y9.41%
EPS Next 3Y7.15%
5. Dividend
5.1 Amount
INFY has a Yearly Dividend Yield of 2.42%. Purely for dividend investing, there may be better candidates out there.
INFY's Dividend Yield is rather good when compared to the industry average which is at 2.60. INFY pays more dividend than 95.06% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, INFY has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.42% |
5.2 History
The dividend of INFY is nicely growing with an annual growth rate of 17.16%!
INFY has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)17.16%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
75.94% of the earnings are spent on dividend by INFY. This is not a sustainable payout ratio.
INFY's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP75.94%
EPS Next 2Y9.41%
EPS Next 3Y7.15%
18.53
+0.01 (+0.05%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners45.59%
Inst Owner Change16.56%
Ins Owners12.74%
Ins Owner ChangeN/A
Market Cap76.80B
Analysts79.15
Price Target19.4 (4.7%)
Short Float %2.87%
Short Ratio8.79
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.42% |
Yearly Dividend0.57
Dividend Growth(5Y)17.16%
DP75.94%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.79%
Min EPS beat(2)-1.14%
Max EPS beat(2)2.71%
EPS beat(4)1
Avg EPS beat(4)-1.12%
Min EPS beat(4)-5.96%
Max EPS beat(4)2.71%
EPS beat(8)2
Avg EPS beat(8)1.38%
EPS beat(12)2
Avg EPS beat(12)-0.47%
EPS beat(16)4
Avg EPS beat(16)-0.97%
Revenue beat(2)0
Avg Revenue beat(2)-2.72%
Min Revenue beat(2)-4.64%
Max Revenue beat(2)-0.81%
Revenue beat(4)0
Avg Revenue beat(4)-1.98%
Min Revenue beat(4)-4.64%
Max Revenue beat(4)-0.81%
Revenue beat(8)0
Avg Revenue beat(8)-1.94%
Revenue beat(12)1
Avg Revenue beat(12)-1.93%
Revenue beat(16)2
Avg Revenue beat(16)-1.73%
PT rev (1m)-3.92%
PT rev (3m)-19.02%
EPS NQ rev (1m)0.05%
EPS NQ rev (3m)-5.06%
EPS NY rev (1m)0.05%
EPS NY rev (3m)-3.62%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.7%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-3.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.71 | ||
| Fwd PE | 22.38 | ||
| P/S | 4.03 | ||
| P/FCF | 19.63 | ||
| P/OCF | 18.4 | ||
| P/B | 6.85 | ||
| P/tB | 7.92 | ||
| EV/EBITDA | 15.63 |
EPS(TTM)0.75
EY4.05%
EPS(NY)0.83
Fwd EY4.47%
FCF(TTM)0.94
FCFY5.09%
OCF(TTM)1.01
OCFY5.44%
SpS4.6
BVpS2.7
TBVpS2.34
PEG (NY)2.53
PEG (5Y)2.34
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 17.94% | ||
| ROE | 27.88% | ||
| ROCE | 32.51% | ||
| ROIC | 23.41% | ||
| ROICexc | 36.17% | ||
| ROICexgc | 44.52% | ||
| OM | 21.15% | ||
| PM (TTM) | 16.39% | ||
| GM | 30.46% | ||
| FCFM | 20.53% |
ROA(3y)18.71%
ROA(5y)18.55%
ROE(3y)29.87%
ROE(5y)28.86%
ROIC(3y)24.18%
ROIC(5y)23.55%
ROICexc(3y)34%
ROICexc(5y)33.29%
ROICexgc(3y)40.01%
ROICexgc(5y)38.92%
ROCE(3y)33.56%
ROCE(5y)32.7%
ROICexcg growth 3Y4.76%
ROICexcg growth 5Y5.75%
ROICexc growth 3Y2.44%
ROICexc growth 5Y4.71%
OM growth 3Y-3%
OM growth 5Y-0.35%
PM growth 3Y-3.39%
PM growth 5Y-2.16%
GM growth 3Y-2.23%
GM growth 5Y-1.65%
F-Score5
Asset Turnover1.09
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.25 | ||
| Debt/EBITDA | 0.15 | ||
| Cap/Depr | 46.49% | ||
| Cap/Sales | 1.37% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 90.86% | ||
| Profit Quality | 125.25% | ||
| Current Ratio | 2.27 | ||
| Quick Ratio | 2.26 | ||
| Altman-Z | 10.56 |
F-Score5
WACC8.58%
ROIC/WACC2.73
Cap/Depr(3y)51.53%
Cap/Depr(5y)56.25%
Cap/Sales(3y)1.52%
Cap/Sales(5y)1.69%
Profit Quality(3y)98.5%
Profit Quality(5y)101.51%
High Growth Momentum
Growth
EPS 1Y (TTM)1.67%
EPS 3Y7.07%
EPS 5Y10.57%
EPS Q2Q%-11.86%
EPS Next Y9.78%
EPS Next 2Y9.41%
EPS Next 3Y7.15%
EPS Next 5Y9.24%
Revenue 1Y (TTM)6.07%
Revenue growth 3Y10.25%
Revenue growth 5Y12.41%
Sales Q2Q%7.92%
Revenue Next Year3.59%
Revenue Next 2Y5.47%
Revenue Next 3Y5.57%
Revenue Next 5Y4.78%
EBIT growth 1Y8.17%
EBIT growth 3Y6.94%
EBIT growth 5Y12.02%
EBIT Next Year18.55%
EBIT Next 3Y10.91%
EBIT Next 5Y9.29%
FCF growth 1Y45.41%
FCF growth 3Y15.48%
FCF growth 5Y17.02%
OCF growth 1Y41.59%
OCF growth 3Y14.33%
OCF growth 5Y13.98%