Is Infosys Limited (INFY) Stock Cheap Or Risky?

As of Thursday close, Infosys Limited’s (NYSE:INFY) stock was up $0.05, moving up 0.25 percent to $20.15. The average number of shares traded per day over the past five days has been 7,626,460 shares. 5 times new highs have been achieved over the past 5 days, with a $1.00 gain in that time frame. In the last twenty days, the average volume was 9,683,015, while in the previous 50 days, it was 9,872,084.

Since last month, INFY stock rose 6.44%. Shares of the company fell to $17.63 on 07/14/22, the lowest level in the past month. A 52-week high of $26.39 was reached on 01/12/22 after having rallying from a 52-week low of $17.52. Since the beginning of this year, INFY’s stock price has dropped by -20.39% or -$5.16, and marked a new high 2 times. However, the stock has declined by -23.65% since its 52-week high.

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Valuation Metrics

Right now, Infosys Limited (INFY) has a P/E ratio of about 30.30. The stock’s beta is 0.96. Besides these, the trailing price-to-sales (P/S) ratio of 5.12, the price-to-book (PB) ratio of 9.12, and the price-to-cash flow ratio of 76.72 may also be considered.

The latest dividend of $0.1710 per share was paid out, which is -3.39% less than last year’s $0.1770. On Tuesday June 28 2022, a $0.0060 dividend decrease was announced.

Financial Health

In the three months ended June 29, Infosys Limited’s quick ratio stood at 1.90, while its current ratio was 1.90, showing that the company is able to pay off its debt. According to company report, the long-term debt-to-equity ratio for the quarter ending June 29 was 0.07, and the total debt-to-equity ratio was 0.08. On the profitability front, the trailing twelve-month gross margin is 31.50% percent. In the year ended June 29, EBITDA margin amounted to 26.24%, whereas operating margins totaled 22.10%. Based on annual data, INFY earned $5.32 billion in gross profit and brought in $16.31 billion in revenue.

A company’s management is another factor that investors consider when determining the profitability of an investment. In the past year, return on investment (ROI) was 24.80%. Return on equity (ROE) for the past 12 months was 30.90%.

In Infosys Limited’s quarter-end financial report for June 29, it reported total debt of $299.0 million. According to the earnings report, the company had a higher net income in the recent quarter than it did in the previous quarter. INFY’s revenue rose 16.86% during the quarter, while net income inched up to $16.31 billion. While analysts expected Infosys Limited to report $0.18 quarterly earnings, the actual figure was $0.16 per share, beating the consensus estimate by -11.10%. During the quarter, the company generated $1.01 billion in EBITDA. The liabilities of Infosys Limited were 5.81 billion at the end of its most recent quarter ended June 29, and its total debt was $767.0 million.

Technical Picture

This quick technical analysis looks at Infosys Limited’s (INFY) price momentum. With a historical volatility rate of 36.55%, the RSI 9-day stood at 69.40% on 04 August.

With respect to its five-day moving average, the current Infosys Limited price is up by +5.22% percent or $1.00. At present, INFY shares trade +5.17% above its 20-day simple moving average and -16.08% percent below its 100-day simple moving average. However, the stock is currently trading approximately +6.67% above its SMA50 and -15.26% below its SMA200.

Stochastic coefficient K was 96.18% and Stochastic coefficient D was 96.65%, while ATR was 0.43. Given the Stochastic reading of 95.06% for the 14-day period, the RSI (14) reading has been calculated as 63.85%. As of today, the MACD Oscillator reading stands at 0.67, while the 14-day reading stands at 0.83.

Analyst Ratings

HSBC Securities upgraded its rating on Infosys Limited (NYSE: INFY) to a Buy in a note to investors on June 01, 2022. The analysts firm previously had a Hold rating on the stock.Infosys Limited (INFY) has been rated Overweight by analysts. According to 2 brokerage firms, INFY is a sell, and 10 firms recommend it is a Hold. There are 0 analysts who say the stock is underweight. A total of 7 analysts rate Infosys Limited stock as buy, with 28 recommending it as overweight.

With a median target price of $21.32, the current consensus forecast for the stock is $14.32 – $29.00. Based on these forecasts, analysts predict Infosys Limited (INFY) will achieve an average price target of $21.45.


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