It hasn't been a great afternoon session for Infosys investors, who have watched their shares sink by -4.3% to a price of $16.82. Some of you might be wondering if it's time to buy the dip. If you are considering this, make sure to check the company's fundamentals first to determine if the shares are fairly valued at today's prices.
a Very Low P/E Ratio but Its Shares Are Expensive:
Infosys Limited, together with its subsidiaries, provides consulting, technology, outsourcing, and 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 30.44 and an average price to book (P/B) ratio of 4.19. In contrast, Infosys has a trailing 12 month P/E ratio of 21.8 and a P/B ratio of 6.3.
Infosys has moved -23.1% over the last year compared to 16.3% for the S&P 500 — a difference of -39.4%. Infosys has a 52 week high of $23.63 and a 52 week low of $15.82.
Generally Positive Cash Flows but Slimmer Gross Margins than the Industry Average of 50.91%:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $12,780 | $13,561 | $16,311 | $18,212 | $18,562 | $19,277 |
| Gross Margins | 33% | 35% | 33% | 30% | 30% | 30% |
| Net Margins | 18% | 19% | 18% | 16% | 17% | 16% |
| Net Income (M) | $2,338 | $2,623 | $2,968 | $2,983 | $3,169 | $3,162 |
| Diluted Shares (M) | 4,265 | 4,251 | 4,219 | 4,188 | 4,145 | 4,152 |
| Earnings Per Share | $0.55 | $0.61 | $0.7 | $0.71 | $0.76 | $0.76 |
| EPS Growth | n/a | 10.91% | 14.75% | 1.43% | 7.04% | 0.0% |
| Avg. Price | $9.66 | $10.96 | $19.88 | $20.98 | $18.38 | $16.86 |
| P/E Ratio | 17.56 | 17.68 | 28.4 | 29.55 | 23.87 | 22.18 |
| Free Cash Flow (M) | $2,611 | $3,258 | $3,345 | $2,853 | $3,148 | $4,351 |
| Current Ratio | 2.62 | 2.55 | 2.0 | 1.81 | 2.31 | 2.27 |
Infosys has generally positive cash flows, an excellent current ratio of 2.27, and positive EPS growth. However, the firm has slimmer gross margins than its peers.
