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. INFY has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. INFY is not valued too expensively and it also shows a decent 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's Return On Assets of 17.94% is amongst the best of the industry. INFY outperforms 97.56% of its industry peers.
The Return On Equity of INFY (27.88%) is better than 90.24% of its industry peers.
Looking at the Return On Invested Capital, with a value of 23.41%, INFY belongs to the top of the industry, outperforming 96.34% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for INFY is above the industry average of 21.60%.
| 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
With an excellent Profit Margin value of 16.39%, INFY belongs to the best of the industry, outperforming 93.90% of the companies in the same industry.
INFY's Profit Margin has declined in the last couple of years.
The Operating Margin of INFY (21.15%) is better than 95.12% of its industry peers.
In the last couple of years the Operating Margin of INFY has remained more or less at the same level.
INFY has a Gross Margin (30.46%) which is comparable to the rest of the 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so INFY is creating value.
INFY has about the same amout of shares outstanding than it did 1 year ago.
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
INFY has an Altman-Z score of 10.45. This indicates that INFY is financially healthy and has little risk of bankruptcy at the moment.
INFY has a Altman-Z score of 10.45. This is amongst the best in the industry. INFY outperforms 91.46% 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 90.24% of its industry peers.
A Debt/Equity ratio of 0.06 indicates that INFY is not too dependend on debt financing.
INFY's Debt to Equity ratio of 0.06 is fine compared to the rest of the industry. INFY outperforms 73.17% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.25 | ||
| Altman-Z | 10.45 |
ROIC/WACC2.75
WACC8.52%
2.3 Liquidity
A Current Ratio of 2.27 indicates that INFY has no problem at all paying its short term obligations.
The Current ratio of INFY (2.27) is better than 69.51% of its industry peers.
A Quick Ratio of 2.26 indicates that INFY has no problem at all paying its short term obligations.
The Quick ratio of INFY (2.26) is better than 69.51% of its industry peers.
| 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.
The Revenue has been growing slightly by 6.07% in the past year.
Measured over the past years, INFY shows a quite strong growth in Revenue. The Revenue has been growing by 12.41% on average per year.
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.
The Revenue is expected to grow by 4.78% on average over the next years.
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
Based on the Price/Earnings ratio of 24.25, the valuation of INFY can be described as rather expensive.
INFY's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 27.41, INFY is valued at the same level.
A Price/Forward Earnings ratio of 22.05 indicates a rather expensive valuation of INFY.
Compared to the rest of the industry, the Price/Forward Earnings ratio of INFY is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of INFY to the average of the S&P500 Index (35.19), we can say INFY is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.25 | ||
| Fwd PE | 22.05 |
4.2 Price Multiples
INFY's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. INFY is cheaper than 62.20% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, INFY is valued a bit cheaper than the industry average as 68.29% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.34 | ||
| EV/EBITDA | 15.4 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates INFY does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of INFY may justify a higher PE ratio.
PEG (NY)2.48
PEG (5Y)2.29
EPS Next 2Y9.41%
EPS Next 3Y7.15%
5. Dividend
5.1 Amount
INFY has a Yearly Dividend Yield of 2.25%. 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 2.45. INFY pays more dividend than 92.68% of the companies in the same industry.
INFY's Dividend Yield is comparable with the S&P500 average which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.25% |
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.
The dividend of INFY is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP75.94%
EPS Next 2Y9.41%
EPS Next 3Y7.15%
18.19
+0.09 (+0.5%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners45.59%
Inst Owner Change0%
Ins Owners12.74%
Ins Owner ChangeN/A
Market Cap75.39B
Analysts79.15
Price Target19.4 (6.65%)
Short Float %3.11%
Short Ratio10.25
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.25% |
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)-1.38%
PT rev (3m)-17.81%
EPS NQ rev (1m)0.58%
EPS NQ rev (3m)-6.19%
EPS NY rev (1m)0%
EPS NY rev (3m)-3.6%
Revenue NQ rev (1m)0.45%
Revenue NQ rev (3m)-4.31%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-3.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.25 | ||
| Fwd PE | 22.05 | ||
| P/S | 3.97 | ||
| P/FCF | 19.34 | ||
| P/OCF | 18.13 | ||
| P/B | 6.75 | ||
| P/tB | 7.8 | ||
| EV/EBITDA | 15.4 |
EPS(TTM)0.75
EY4.12%
EPS(NY)0.83
Fwd EY4.54%
FCF(TTM)0.94
FCFY5.17%
OCF(TTM)1
OCFY5.52%
SpS4.58
BVpS2.69
TBVpS2.33
PEG (NY)2.48
PEG (5Y)2.29
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 | 10.45 |
F-Score5
WACC8.52%
ROIC/WACC2.75
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%