Once a growth darling and a play on the rise of outsourcing, Infosys (Nasdaq:INFY)
has had a rougher go of it over the past few years an strategic
missteps compromised the company's growth and market share. More
recently, investors have cheered the return of NR Narayana Murthy to the
company as executive chairman and the vision he laid out for a return
to success based around improving employee morale/performance and better
appreciating the actual needs of customers.
It's much too soon for any of that to make a major difference, but
Infosys's strong first fiscal quarter results are a positive step all
the same. If nothing else, it does show that the company is not so far
behind that it can't still win deals and deliver good results. While the
shares have already bounced about 20% off of a recent low, a fair value
in the mid-$50s gives investors a reason to hang on for a little while
longer.
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Showing posts with label Infosys. Show all posts
Showing posts with label Infosys. Show all posts
Friday, July 12, 2013
Friday, June 28, 2013
Investopedia: Weak Consulting Stings Accenture, But The Valuation Is Interesting
With weak IT spending in hardware and software, it shouldn't come as a
huge surprise that conditions have softened in the service area as well.
That's bad news for Accenture (NYSE:ACN), as well as rivals like IBM (NYSE:IBM) and Cognizant (Nasdaq:CTSH),
and Accenture is seeing both sluggish bookings in consulting as well as
a slower process of converting those bookings into revenue. While
current conditions aren't the best, Accenture is a company built to win
over the long term, and today's valuation is interesting for investors
willing to be patient during this downturn.
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Monday, April 15, 2013
Investopedia: Infosys Struggling To Make The Changes
Change seldom comes easy, particularly when the underlying market
conditions are challenging. With multiple reports and warnings pointing
to a tough environment overall in tech and companies like Accenture (NYSE:ACN) seeing more challenging conditions in outsourced IT, Infosys (Nasdaq:INFY)
has some headwinds. At the same time, the company's fiscal fourth
quarter results suggest some self-inflicted wounds. While the shares
look undervalued on a long-term basis, it may be a rocky ride if
near-term results don't get meaningful better soon.
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Friday, January 25, 2013
Investopedia: IBM Brings A Little Relief To Tech Investors
The earnings from tech/IT giant IBM (NYSE:IBM)
should give tech investors a little respite from the fear cycle going
into calendar fourth quarter earnings - at least until the next widely
followed company flames out with results and/or guidance. Not only did
IBM do quite well with revenue and margin performance, the company's
guidance for 2013 was both solid and not particularly back end-loaded.
These shares aren't particularly cheap, but IBM remains a reasonable
one-stop shop for investors seeking tech exposure.
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Thursday, October 18, 2012
Investopedia: IBM's Soft Sales Bring A Chill To Tech
Although investors had been lowering their expectations for tech sector growth/performance this quarter, IBM (NYSE:IBM)
still managed to spook the Street with soft revenue in both hardware
and software. The long-term picture for IBM hasn't changed all that
much, though it is likely that tech investors are going to be chewing
their nails for at least another quarter. In the meantime, while IBM
remains a well-run and comprehensive play on technology, the stock still
isn't a great bargain.
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Tuesday, October 16, 2012
Investopedia: Is Infosys Losing Ground In IT Services?
IT services is a lucrative market, as investors in IBM (NYSE:IBM), Accenture (NYSE:ACN) and Cognizant Technology Solutions (Nasdaq:CTSH) know quite well. As one of the largest players, India's Infosys (Nasdaq:INFY)
has enjoyed ample growth over the years, but the question is whether
the company is still well-positioned to exploit ongoing growth in
service outsourcing.
Although the valuation does not look especially demanding today, it's
worth asking whether management can stabilize its margins and hold (or
gain) share in a still-growing market.
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Monday, March 26, 2012
Investopedia: Healthier IT Markets Helping Accenture
Outsourcing may still get a bad rap, but the fact remains that it's a major growth market around the world today, and Accenture (NYSE:ACN) continues to reap the benefits. At the same time, the company is hardly suffering in its consulting business. While the market has caught on to some of the value in this story, investors should yet expect to see further gains from this stock.
Good Second Quarter Numbers
Accenture reported that revenue grew 12% as reported or 13% in local currency. Outsourcing was again the growth leader, as revenue rose 19%. Consulting was a laggard, but still saw top-line growth of 8%. Revenue in the core Americas region climbed 13%, and the company saw solid growth across its addressed industry groups.
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Good Second Quarter Numbers
Accenture reported that revenue grew 12% as reported or 13% in local currency. Outsourcing was again the growth leader, as revenue rose 19%. Consulting was a laggard, but still saw top-line growth of 8%. Revenue in the core Americas region climbed 13%, and the company saw solid growth across its addressed industry groups.
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Sunday, October 2, 2011
Investopedia: Does The Market Expect Trouble At Accenture?
Sometimes, investors should step back and compare the conventional wisdom on a story with what actually seems to be in the price. Accenture (NYSE:ACN) has long been called a Wall Street "darling" as it is arguably the most well-respected name in global consulting and outsourcing. Yet, despite this love and despite the ongoing growth in its core markets, Accenture's current share price does not seem overvalued at all.
A Surprising Cap to the Year
Accenture ended the year on a strong note. Reported revenue rose 23%, or 14% in local currency, from last year's level and stayed flat on a sequential basis. Growth was pretty consistent across all of the categories - consulting was up 25% annually and down 2% sequentially, while outsourcing was up 21% annually and up 2% sequentially. Across the major market categories, growth was generally in the 20%+ range (except for the health/public service category), though financial services was a little soft on a sequential basis.
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A Surprising Cap to the Year
Accenture ended the year on a strong note. Reported revenue rose 23%, or 14% in local currency, from last year's level and stayed flat on a sequential basis. Growth was pretty consistent across all of the categories - consulting was up 25% annually and down 2% sequentially, while outsourcing was up 21% annually and up 2% sequentially. Across the major market categories, growth was generally in the 20%+ range (except for the health/public service category), though financial services was a little soft on a sequential basis.
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Monday, April 25, 2011
Investopedia: Signings A Small Thorn In IBM's Paw
Old-tech hasn't been getting much love lately, but this earnings cycle may help bring investors back to many of these old-school tech names. For although weak signings in the service business may send some investors to the sidelines, IBM (NYSE:IBM) reported an otherwise solid quarter and Big Blue remains a respectable less-risk play on technology.
A Mostly Solid First Quarter
IBM reported top-line growth of 8%, adjusted down to 5% on a constant currency basis. Growth was led by the Systems and Technology business (hardware, mostly), which posted 19% growth with strong mainframe and UNIX business. Software grew 6% this time around, while the services business rose by a like amount.
IBM also delivered solid operating leverage for the first quarter, though readers should realize that there are a lot of adjustments and moving parts here and the numbers will vary from investor to investor depending upon what charges they choose to add back. Nevertheless, gross margin ticked up almost a full point, while operating margin expanded nicely as adjusted operating profits grew more than 20%.
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A Mostly Solid First Quarter
IBM reported top-line growth of 8%, adjusted down to 5% on a constant currency basis. Growth was led by the Systems and Technology business (hardware, mostly), which posted 19% growth with strong mainframe and UNIX business. Software grew 6% this time around, while the services business rose by a like amount.
IBM also delivered solid operating leverage for the first quarter, though readers should realize that there are a lot of adjustments and moving parts here and the numbers will vary from investor to investor depending upon what charges they choose to add back. Nevertheless, gross margin ticked up almost a full point, while operating margin expanded nicely as adjusted operating profits grew more than 20%.
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Thursday, January 20, 2011
Investopedia: Big, Blue, And Kinda Cheap
If investors are looking for a one-stop shop in technology, IBM (NYSE:IBM) is a good candidate. The company makes mainframes, servers, develops all kinds of software and is a leading provider of technology services and outsourcing. Of course, there are no free lunches, and investors pay for IBM's ubiquity in lower growth and widespread competition. All of that being said, investors may want to check out this name as a later-cycle undervalued tech play.
The Quarter That Was
By almost all accounts, IBM had a solid end to its fiscal year. Revenue climbed a little less than 7%, with systems (hardware) leading the way at 21% growth, software following at 7% (12% on an adjusted basis), and services lagging at 2% growth. Systems revenue was helped by strong refresh cycle in System Z (up 69%), while System X and storage were also reasonably strong. Although service revenue growth was sluggish this quarter, the company did report very strong bookings.
IBM did well in leveraging this additional growth into profits. Gross margin improved about 70 basis points (to 49%), though weakness in services was a dead weight. Operating income grew 9% in the period, and the company saw an approximate 80 basis point improvement in operating margin. Looking at the segment pretax margin data, it was no surprise to see strong software margins, but it might surprise some to see that IBM's hardware business is actually more profitable than its service business.
Looking Through and Ahead
As IBM's fourth-quarter numbers suggest, services have not rebounded to the same extent as systems and software. Then again, on an industry-wide basis they did not fall as much either during the worst of the recession.
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The Quarter That Was
By almost all accounts, IBM had a solid end to its fiscal year. Revenue climbed a little less than 7%, with systems (hardware) leading the way at 21% growth, software following at 7% (12% on an adjusted basis), and services lagging at 2% growth. Systems revenue was helped by strong refresh cycle in System Z (up 69%), while System X and storage were also reasonably strong. Although service revenue growth was sluggish this quarter, the company did report very strong bookings.
IBM did well in leveraging this additional growth into profits. Gross margin improved about 70 basis points (to 49%), though weakness in services was a dead weight. Operating income grew 9% in the period, and the company saw an approximate 80 basis point improvement in operating margin. Looking at the segment pretax margin data, it was no surprise to see strong software margins, but it might surprise some to see that IBM's hardware business is actually more profitable than its service business.
Looking Through and Ahead
As IBM's fourth-quarter numbers suggest, services have not rebounded to the same extent as systems and software. Then again, on an industry-wide basis they did not fall as much either during the worst of the recession.
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Wednesday, October 13, 2010
5 Software Stocks Worth A Closer Look
Software is a huge sector, and like any huge sector there is a mix of wheat and chaff. The trick, then, is to separate the two and focus one's time on the most promising ideas. The following are five above-average software companies that are worth a closer look by investors seeking some technology ideas with solid chances of market-beating performance.
1. Cognizant Technology Solutions (Nasdaq:CTSH)
Cognizant is the youngest of the Tier 1 Indian IT firms (which includes Infosys (Nasdaq:INFY) and Wipro (NYSE:WIT)), and has the added twist of a U.S.-based management. Employee turnover is quite high compared to U.S. software companies, but this is nothing new in this sector. The company has a high reliance on financial services, but recently crossed the $1 billion mark in quarterly revenue despite the uncertain conditions in the sector. Wage and tax pressures in India are concerns to monitor, but recent revenue growth in excess of 40% and increasing analyst estimates suggest solid near-term momentum.
Please click the link for the full piece:
http://stocks.investopedia.com/stock-analysis/2010/5-Software-Stocks-Worth-A-Closer-Look-CTSH-DST-MCRS-ORCL-RHT-INFY-VMW1013.aspx
1. Cognizant Technology Solutions (Nasdaq:CTSH)
Cognizant is the youngest of the Tier 1 Indian IT firms (which includes Infosys (Nasdaq:INFY) and Wipro (NYSE:WIT)), and has the added twist of a U.S.-based management. Employee turnover is quite high compared to U.S. software companies, but this is nothing new in this sector. The company has a high reliance on financial services, but recently crossed the $1 billion mark in quarterly revenue despite the uncertain conditions in the sector. Wage and tax pressures in India are concerns to monitor, but recent revenue growth in excess of 40% and increasing analyst estimates suggest solid near-term momentum.
Please click the link for the full piece:
http://stocks.investopedia.com/stock-analysis/2010/5-Software-Stocks-Worth-A-Closer-Look-CTSH-DST-MCRS-ORCL-RHT-INFY-VMW1013.aspx
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