INFOSYS LTD-SP ADR (INFY) Stock Fundamental Analysis
NYSE:INFY - New York Stock Exchange, Inc. - US4567881085 - ADR - Currency: USD
We assign a fundamental rating of 7 out of 10 to INFY. INFY was compared to 82 industry peers in the IT Services industry. Both the health and profitability get an excellent rating, making INFY a very profitable company, without any liquidiy or solvency issues. INFY has a decent growth rate and is not valued too expensively. With these ratings, INFY could be worth investigating further 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.
INFY had positive earnings in each of the past 5 years.
In the past 5 years INFY always reported a positive cash flow from operatings.
1.2 Ratios
INFY has a better Return On Assets (19.00%) than 98.72% of its industry peers.
INFY's Return On Equity of 29.79% is amongst the best of the industry. INFY outperforms 89.74% of its industry peers.
Looking at the Return On Invested Capital, with a value of 23.39%, INFY belongs to the top of the industry, outperforming 97.44% of the companies in the same industry.
INFY had an Average Return On Invested Capital over the past 3 years of 24.61%. This is significantly above the industry average of 10.13%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19% | ||
| ROE | 29.79% | ||
| ROIC | 23.39% |
ROA(3y)18.98%
ROA(5y)18.54%
ROE(3y)30.36%
ROE(5y)28.35%
ROIC(3y)24.61%
ROIC(5y)22.98%
1.3 Margins
Looking at the Profit Margin, with a value of 17.16%, INFY belongs to the top of the industry, outperforming 93.59% of the companies in the same industry.
INFY's Profit Margin has declined in the last couple of years.
INFY has a Operating Margin of 20.71%. This is amongst the best in the industry. INFY outperforms 96.15% of its industry peers.
In the last couple of years the Operating Margin of INFY has declined.
INFY's Gross Margin of 30.18% is on the low side compared to the rest of the industry. INFY is outperformed by 60.26% of its industry peers.
In the last couple of years the Gross Margin of INFY has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.71% | ||
| PM (TTM) | 17.16% | ||
| GM | 30.18% |
OM growth 3Y-5.66%
OM growth 5Y-2.17%
PM growth 3Y-3.94%
PM growth 5Y-1.73%
GM growth 3Y-4.81%
GM growth 5Y-2.88%
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.
The debt/assets ratio for INFY has been reduced compared to a year ago.
2.2 Solvency
INFY has an Altman-Z score of 12.07. This indicates that INFY is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of INFY (12.07) is better than 94.87% of its industry peers.
The Debt to FCF ratio of INFY is 0.32, which is an excellent value as it means it would take INFY, only 0.32 years of fcf income to pay off all of its debts.
INFY's Debt to FCF ratio of 0.32 is amongst the best of the industry. INFY outperforms 91.03% of its industry peers.
A Debt/Equity ratio of 0.07 indicates that INFY is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.07, INFY is in the better half of the industry, outperforming 73.08% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.07 | ||
| Debt/FCF | 0.32 | ||
| Altman-Z | 12.07 |
ROIC/WACC2.07
WACC11.31%
2.3 Liquidity
A Current Ratio of 2.19 indicates that INFY has no problem at all paying its short term obligations.
INFY has a better Current ratio (2.19) than 73.08% of its industry peers.
INFY has a Quick Ratio of 2.19. This indicates that INFY is financially healthy and has no problem in meeting its short term obligations.
INFY has a Quick ratio of 2.19. This is in the better half of the industry: INFY outperforms 73.08% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.19 | ||
| Quick Ratio | 2.19 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 13.24% over the past year.
The Earnings Per Share has been growing by 11.87% on average over the past years. This is quite good.
INFY shows a small growth in Revenue. In the last year, the Revenue has grown by 4.70%.
Measured over the past years, INFY shows a quite strong growth in Revenue. The Revenue has been growing by 13.20% on average per year.
EPS 1Y (TTM)13.24%
EPS 3Y11.6%
EPS 5Y11.87%
EPS Q2Q%11.19%
Revenue 1Y (TTM)4.7%
Revenue growth 3Y15.22%
Revenue growth 5Y13.2%
Sales Q2Q%7.58%
3.2 Future
The Earnings Per Share is expected to grow by 8.29% 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 7.34% yearly.
EPS Next Y2.91%
EPS Next 2Y7.81%
EPS Next 3Y8.79%
EPS Next 5Y8.29%
Revenue Next Year3.71%
Revenue Next 2Y6.53%
Revenue Next 3Y7.48%
Revenue Next 5Y7.34%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 27.49, the valuation of INFY can be described as expensive.
Based on the Price/Earnings ratio, INFY is valued a bit cheaper than 61.54% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 29.63. INFY is around the same levels.
INFY is valuated rather expensively with a Price/Forward Earnings ratio of 24.86.
Compared to the rest of the industry, the Price/Forward Earnings ratio of INFY indicates a somewhat cheap valuation: INFY is cheaper than 61.54% of the companies listed in the same industry.
INFY is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.49 | ||
| Fwd PE | 24.86 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, INFY is valued a bit cheaper than 64.10% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of INFY indicates a somewhat cheap valuation: INFY is cheaper than 60.26% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.23 | ||
| EV/EBITDA | 19.79 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of INFY may justify a higher PE ratio.
PEG (NY)9.43
PEG (5Y)2.32
EPS Next 2Y7.81%
EPS Next 3Y8.79%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.25%, INFY has a reasonable but not impressive dividend return.
INFY's Dividend Yield is rather good when compared to the industry average which is at 2.96. INFY pays more dividend than 92.31% of the companies in the same industry.
INFY's Dividend Yield is comparable with the S&P500 average which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.25% |
5.2 History
The dividend of INFY has a limited annual growth rate of 2.38%.
INFY has paid a dividend for at least 10 years, which is a reliable track record.
INFY has decreased its dividend recently.
Dividend Growth(5Y)2.38%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
70.64% of the earnings are spent on dividend by INFY. This is not a sustainable payout ratio.
INFY's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP70.64%
EPS Next 2Y7.81%
EPS Next 3Y8.79%
21.17
-0.18 (-0.84%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners49.75%
Inst Owner Change3.27%
Ins Owners13.51%
Ins Owner ChangeN/A
Market Cap87.69B
Analysts78.3
Price Target25.26 (19.32%)
Short Float %2.88%
Short Ratio12.38
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.25% |
Yearly Dividend35.5
Dividend Growth(5Y)2.38%
DP70.64%
Div Incr Years1
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-3.03%
Min EPS beat(2)-5.96%
Max EPS beat(2)-0.1%
EPS beat(4)1
Avg EPS beat(4)4.27%
Min EPS beat(4)-5.96%
Max EPS beat(4)25.93%
EPS beat(8)1
Avg EPS beat(8)0.01%
EPS beat(12)2
Avg EPS beat(12)-1.13%
EPS beat(16)4
Avg EPS beat(16)-1.23%
Revenue beat(2)0
Avg Revenue beat(2)-1.24%
Min Revenue beat(2)-1.53%
Max Revenue beat(2)-0.95%
Revenue beat(4)0
Avg Revenue beat(4)-1.98%
Min Revenue beat(4)-3.74%
Max Revenue beat(4)-0.95%
Revenue beat(8)0
Avg Revenue beat(8)-2.09%
Revenue beat(12)2
Avg Revenue beat(12)-1.65%
Revenue beat(16)3
Avg Revenue beat(16)-1.55%
PT rev (1m)2.49%
PT rev (3m)0.48%
EPS NQ rev (1m)0.04%
EPS NQ rev (3m)0.04%
EPS NY rev (1m)0.05%
EPS NY rev (3m)0.05%
Revenue NQ rev (1m)-0.4%
Revenue NQ rev (3m)-0.4%
Revenue NY rev (1m)0.43%
Revenue NY rev (3m)0.34%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.49 | ||
| Fwd PE | 24.86 | ||
| P/S | 4.83 | ||
| P/FCF | 27.23 | ||
| P/OCF | 25.51 | ||
| P/B | 8.39 | ||
| P/tB | 9.86 | ||
| EV/EBITDA | 19.79 |
EPS(TTM)0.77
EY3.64%
EPS(NY)0.85
Fwd EY4.02%
FCF(TTM)0.78
FCFY3.67%
OCF(TTM)0.83
OCFY3.92%
SpS4.38
BVpS2.52
TBVpS2.15
PEG (NY)9.43
PEG (5Y)2.32
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19% | ||
| ROE | 29.79% | ||
| ROCE | 32.2% | ||
| ROIC | 23.39% | ||
| ROICexc | 33.29% | ||
| ROICexgc | 41.07% | ||
| OM | 20.71% | ||
| PM (TTM) | 17.16% | ||
| GM | 30.18% | ||
| FCFM | 17.76% |
ROA(3y)18.98%
ROA(5y)18.54%
ROE(3y)30.36%
ROE(5y)28.35%
ROIC(3y)24.61%
ROIC(5y)22.98%
ROICexc(3y)33.44%
ROICexc(5y)32.07%
ROICexgc(3y)38.4%
ROICexgc(5y)37.07%
ROCE(3y)33.88%
ROCE(5y)31.63%
ROICexcg growth 3Y1.22%
ROICexcg growth 5Y-0.55%
ROICexc growth 3Y1.89%
ROICexc growth 5Y-0.96%
OM growth 3Y-5.66%
OM growth 5Y-2.17%
PM growth 3Y-3.94%
PM growth 5Y-1.73%
GM growth 3Y-4.81%
GM growth 5Y-2.88%
F-Score5
Asset Turnover1.11
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.07 | ||
| Debt/FCF | 0.32 | ||
| Debt/EBITDA | 0.17 | ||
| Cap/Depr | 40.22% | ||
| Cap/Sales | 1.19% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 80.04% | ||
| Profit Quality | 103.49% | ||
| Current Ratio | 2.19 | ||
| Quick Ratio | 2.19 | ||
| Altman-Z | 12.07 |
F-Score5
WACC11.31%
ROIC/WACC2.07
Cap/Depr(3y)56.75%
Cap/Depr(5y)69.81%
Cap/Sales(3y)1.66%
Cap/Sales(5y)2.14%
Profit Quality(3y)89.5%
Profit Quality(5y)94.84%
High Growth Momentum
Growth
EPS 1Y (TTM)13.24%
EPS 3Y11.6%
EPS 5Y11.87%
EPS Q2Q%11.19%
EPS Next Y2.91%
EPS Next 2Y7.81%
EPS Next 3Y8.79%
EPS Next 5Y8.29%
Revenue 1Y (TTM)4.7%
Revenue growth 3Y15.22%
Revenue growth 5Y13.2%
Sales Q2Q%7.58%
Revenue Next Year3.71%
Revenue Next 2Y6.53%
Revenue Next 3Y7.48%
Revenue Next 5Y7.34%
EBIT growth 1Y-0.47%
EBIT growth 3Y8.7%
EBIT growth 5Y10.75%
EBIT Next Year20.75%
EBIT Next 3Y13.97%
EBIT Next 5Y11.37%
FCF growth 1Y39.82%
FCF growth 3Y1.48%
FCF growth 5Y11.42%
OCF growth 1Y33.38%
OCF growth 3Y1.47%
OCF growth 5Y9.73%