On Jan 17, we upgraded
) to Outperform from Neutral driven by its impressive
third-quarter fiscal 2014 results. The Information Technology
service provider sports a Zacks Rank #2 (Buy).
Why the Upgrade?
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 8.0%.
Quarterly earnings were up 6.6% year over year. Over the past
four quarters, Infosys has delivered an average surprise of
The outperformance was driven by the company's differentiating
strategy to capture potential opportunities and strategic
Infosys also reported strong year-over-year growth in revenues
from different geographic regions. Revenues from North America
grew 60.0% followed by Europe, where revenues increased 24.9%.
Coming next in the line is Rest of World with revenue growth of
12.5% followed by India with 2.6% growth.
Following the release of third-quarter results, the Zacks
Consensus Estimate for fiscal 2014 increased 1.0% to $3.01 per
share. Moreover, the Zacks Consensus Estimate for fiscal 2015
also increased by 1.4% to $3.37 per share.
Additionally, Infosys has a strong balance sheet, a
substantial cash flow and no debt. In the last quarter, the
company also reported higher revenues across all its businesses.
Furthermore, positive estimate revisions, volume growth, client
additions, five large deal wins and increased sales momentum in
its big data and cloud offerings are some of the catalysts
driving the stock.
Following the earnings release, the management also updated
the guidance for fiscal 2014. Revenues are expected to increase
in the range of 11.5% to 12.0%, against 9% to 10% guided earlier.
The revenue as per the Zacks Consensus Estimate is currently
pegged at $8.3 billion for fiscal 2014.
Other Stocks to Consider
Some other stocks with the same Zacks Rank are
Camelot Information Systems Inc.
GTT Communications, Inc.
CAMELOT INF-ADS (CIS): Get Free Report
AMDOCS LTD (DOX): Free Stock Analysis Report
GTT COMMUNICATN (GTT): Free Stock Analysis
INFOSYS LTD (INFY): Free Stock Analysis
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