Infosys Is No Bargain - Growth Outlook Justifies Earnings Pullback
- Infosys is focusing on revenue growth after trailing its competitors over the past years; however, forward-looking view is moderate.
- Gross margins are declining even with increased utilization, indicating significant pricing pressures.
- Operating margins are stabilizing but at lower levels, driven by increased competition and cost-consciousness.
- Competitors are growing faster and more profitably, and outspending Infosys on sales & marketing.
- Valuations are not attractive at current levels to buy into the stock.