Today we're going to take a closer look at large-cap Technology company Infosys, whose shares are currently trading at $20.4. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!
Infosys's Valuation Is in Line With Its Sector Averages:
Infosys Limited, together with its subsidiaries, provides consulting, technology, outsourcing, and next-generation digital services in North America, Europe, India, and internationally. The company belongs to the Technology sector, which has an average price to earnings (P/E) ratio of 35.0 and an average price to book (P/B) ratio of 7.92. In contrast, Infosys has a trailing 12 month P/E ratio of 28.7 and a P/B ratio of 8.78.
Infosys's PEG ratio is 1.96, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.
The Company Has a Positive Net Current Asset Value:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $10,939 | $11,799 | $12,780 | $13,561 | $16,311 | $18,212 |
| Revenue Growth | n/a | 7.86% | 8.31% | 6.11% | 20.28% | 11.65% |
| Gross Margins | 36% | 35% | 33% | 35% | 33% | 30% |
| Operating Margins | 24% | 23% | 21% | 25% | 23% | 21% |
| Net Margins | 23% | 19% | 18% | 19% | 18% | 16% |
| Net Income (MM) | $2,486 | $2,200 | $2,338 | $2,623 | $2,968 | $2,983 |
| Earnings Per Share | $1.14 | $0.51 | $0.55 | $0.62 | $0.7 | $0.71 |
| Diluted Shares (MM) | 2,184 | 4,353 | 4,265 | 4,251 | 4,219 | 4,188 |
| Free Cash Flow (MM) | $2,257 | $2,262 | $2,611 | $3,258 | $3,345 | $2,853 |
| Current Ratio | 3.55 | 2.84 | 2.62 | 2.55 | 2.0 | 1.81 |
