On Feb 28, shares of
) hit a new 52-week high of $62.13 per share. The momentum in the
share price was driven by the recent development at its
subsidiary Infosys BPO which revealed its novel Process
Progression Model (PPM) designed to enhance their client
experience. Shares gained almost 16.3% over the 1-year
PPM is a unique framework intended to optimize the clients
business by integrating skilled personnel, stringent risk
vigilance and an efficient automation process. The framework is
adept in outlining the plan for business improvement while also
matching the progress with the client's requirements. This new
model is expected to leverage the business processes while
improving the company's service going forward.
With respect to earnings performance, Infosys delivered
positive earnings surprises in all of last four quarters with an
average beat of 5.9%. The solid performance of the company is
largely fueled by its differentiating strategy to capture
potential opportunities and its strategic organizational
Earlier on Jan 10, Infosys reported third-quarter fiscal 2014
earnings per ADS from continuing operations of 81 cents per
share, surpassing the Zacks Consensus Estimate of 75 cents by
This Zacks Rank #2 (Buy) company has been witnessing volume
growth, client additions, a number of large deal wins along with
an increased sales momentum in its big data and cloud offerings.
In the last quarter, the company reported higher revenues across
all its businesses.
After having witnessed continued decline in margins for about
the past six quarters, Infosys reported increase in both its
gross and operating margins during the third quarter of 2014.
Gross margin for the quarter improved by 80 basis points while
operating margin improved by 150 basis points, mainly on account
of initiatives to increase efficiency in its operations.
Moreover, Infosys has a strong balance sheet and generates a
substantial cash flow. In the last quarter, the company
reported higher revenues across its businesses and regions.
Further, Infosys continues to strengthen its expertise and
). During the last reported quarter, Gartner's International
Retail Core Banking report placed Infosys 'Finacle' as the Leader
in its Magic Quadrant for International Retail Core Banking for
the consecutive seventh time.
The Zacks Consensus Estimate for earnings per share for 2014
is currently pegged at $3.02. The expected long-term earnings
growth rate for the stock is 14.8%.
Over the last 7 days, earnings estimates for Infosys did not
show any upward or downward revision for 2013. Although there is
a lacuna of estimate revisions, we envision an uptrend for the
stock, backed by its strong growth potential.
Other Stocks to Consider
Some other stocks in the industry having similar Zacks Rank
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