Infosys (NYSE:INFY) Shares Gap Down on Disappointing Earnings

Infosys Ltd. (NYSE:INFY) gapped down before the market opened on Friday following a dissappointing earnings announcement. The stock had previously closed at $13.22, but opened at $12.61. Infosys shares last traded at $12.5840, with a volume of 16,169,072 shares traded.

The technology company reported $0.20 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $0.21 by ($0.01). Infosys had a net margin of 16.38% and a return on equity of 33.91%.

Key Infosys News

Here are the key news stories impacting Infosys this week:

• Positive Sentiment: Infosys reported $5.2 billion in large-deal total contract value during the quarter, with 62% representing net-new business. The company also said AI-related revenue increased 29% sequentially, supporting its longer-term growth strategy. Infosys AI strategy and Q2 results
• Positive Sentiment: Q2 revenue reached $5.145 billion, up 1.5% year over year and 1.2% sequentially in constant currency. Operating margin remained stable at 21%, within the company’s 20%-22% target range. Infosys quarterly performance
• Neutral Sentiment: Infosys issued FY2027 revenue guidance of $20.4 billion to $20.6 billion, compared with a consensus estimate of $20.4 billion. It retained its operating-margin guidance of 20%-22%, but the forecast implies only 1%-2% revenue growth, limiting near-term upside expectations.
• Negative Sentiment: Quarterly EPS was $0.20, below the $0.21 consensus estimate, while reports highlighted a decline in net profit despite revenue growth. The earnings miss and reduced annual growth outlook were the primary reasons investors questioned whether the AI revenue acceleration can offset broader profitability and demand concerns. Why Infosys AI growth did not offset earnings concerns

Analyst Upgrades and Downgrades

Several brokerages have weighed in on INFY. BMO Capital Markets reissued a “market perform” rating and set a $12.00 price objective (down from $13.00) on shares of Infosys in a report on Friday, July 24th. JPMorgan Chase & Co. restated a “neutral” rating and issued a $10.90 target price (down from $12.70) on shares of Infosys in a research note on Friday, July 24th. Wells Fargo & Company set a $11.00 price target on shares of Infosys and gave the stock an “equal weight” rating in a research report on Friday, June 26th. Susquehanna decreased their price target on Infosys from $12.00 to $11.00 and set a “neutral” rating for the company in a research note on Friday, July 24th. Finally, Stifel Nicolaus set a $13.00 price objective on Infosys and gave the company a “hold” rating in a report on Thursday, July 16th. Ten research analysts have rated the stock with a Hold rating and one has issued a Sell rating to the company’s stock. According to data from MarketBeat.com, the company has a consensus rating of “Reduce” and an average price target of $11.45.

Hedge Funds Weigh In On Infosys

A number of large investors have recently bought and sold shares of INFY. RWC Asset Advisors US LLC boosted its stake in Infosys by 5.3% in the third quarter. RWC Asset Advisors US LLC now owns 2,183,057 shares of the technology company’s stock valued at $23,490,000 after acquiring an additional 108,924 shares during the period. Vest Financial LLC acquired a new stake in shares of Infosys during the 3rd quarter worth approximately $2,025,000. Pinnacle Associates Ltd. acquired a new stake in shares of Infosys during the 3rd quarter worth approximately $369,000. Nisa Investment Advisors LLC lifted its holdings in shares of Infosys by 87.1% in the 3rd quarter. Nisa Investment Advisors LLC now owns 3,683 shares of the technology company’s stock worth $40,000 after purchasing an additional 1,715 shares during the last quarter. Finally, Frank Rimerman Advisors LLC boosted its position in Infosys by 2.8% during the 3rd quarter. Frank Rimerman Advisors LLC now owns 155,698 shares of the technology company’s stock valued at $1,675,000 after purchasing an additional 4,174 shares during the period. Institutional investors own 16.20% of the company’s stock.

Infosys Stock Performance

The stock has a market capitalization of $50.99 billion, a P/E ratio of 15.52, a P/E/G ratio of 2.97 and a beta of 0.88. The stock has a 50 day moving average of $11.45 and a 200 day moving average of $11.93.

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.