Infosys (NYSE:INFY) Announces Earnings Results, Misses Estimates By $0.01 EPS

Infosys (NYSE:INFY) issued its quarterly earnings data on Thursday. The technology company reported $0.20 EPS for the quarter, missing the consensus estimate of $0.21 by ($0.01), Zacks reports. Infosys had a net margin of 16.38% and a return on equity of 33.41%. The business had revenue of $4.99 billion for the quarter, compared to analysts’ expectations of $5.08 billion.

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 Stock Up 4.3%

Shares of INFY stock opened at $11.13 on Friday. The firm has a market capitalization of $45.03 billion, a price-to-earnings ratio of 13.74, a price-to-earnings-growth ratio of 1.40 and a beta of 0.90. Infosys has a 12-month low of $10.30 and a 12-month high of $30.00. The firm has a fifty day moving average of $11.62 and a 200-day moving average of $13.71.

Infosys News Summary

Here are the key news stories impacting Infosys this week:

• Positive Sentiment: Infosys highlighted AI revenues at 8.2% of sales, showing continued traction in higher-growth services, while operating margin held firm at 21.1%. Infosys: AI Revenues at 8.2% in Q1; Resilient Operating Margin of 21.1%
• Positive Sentiment: The company reported strong large-deal wins of $3.6 billion and generated robust free cash flow, which supports the longer-term investment case. Infosys: AI Revenues at 8.2% in Q1; Resilient Operating Margin of 21.1%
• Neutral Sentiment: Infosys named Ashiss Kumar Dash as CEO-designate, giving the market a clearer leadership succession plan. India’s Infosys misses quarterly revenue view, names CEO designate
• Negative Sentiment: Q1 earnings and revenue missed estimates, with softer volumes and a client exit offsetting growth in AI services. Infosys Q1 Earnings Miss Estimates, Revenues Increase Y/Y
• Negative Sentiment: Infosys narrowed its FY27 revenue growth outlook to 1.5%-3.0%, signaling a more cautious view on demand and contributing to the stock’s decline. India’s Infosys misses quarterly revenue view, names CEO designate
• Negative Sentiment: Several brokerages cut price targets or turned more cautious after the results, reinforcing concern that near-term upside may be limited. These Analysts Slash Their Forecasts On Infosys After Q1 Results

Wall Street Analyst Weigh In

A number of research firms have weighed in on INFY. Weiss Ratings reissued a “hold (c-)” rating on shares of Infosys in a research note on Monday, June 8th. Susquehanna decreased their price target on Infosys from $12.00 to $11.00 and set a “neutral” rating on the stock in a research note on Friday. Stifel Nicolaus set a $13.00 target price on Infosys and gave the stock a “hold” rating in a research report on Thursday, July 16th. TD Cowen reaffirmed a “hold” rating and issued a $9.00 target price (down from $10.00) on shares of Infosys in a research report on Friday. Finally, HSBC set a $11.47 target price on shares of Infosys in a report on Friday. Eight analysts have rated the stock with a Hold rating and one has given a Sell rating to the company. According to MarketBeat.com, the stock currently has a consensus rating of “Reduce” and an average price target of $11.63.

Institutional Investors Weigh In On Infosys

Several hedge funds have recently added to or reduced their stakes in INFY. Dynamic Technology Lab Private Ltd acquired a new position in Infosys during the first quarter valued at approximately $239,000. NewEdge Advisors LLC raised its position in shares of Infosys by 79.9% during the first 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 during the period. Finally, MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. increased its position in shares of Infosys by 6.4% during the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 63,155 shares of the technology company’s stock worth $1,153,000 after acquiring an additional 3,804 shares in the last quarter. Institutional investors and hedge funds own 16.20% of the company’s stock.

Infosys Company Profile

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.