Value
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.3 |
| P/S | 8.8 |
| EV/EBITDA | 0.4 |
| Fwd P/E | 8.9 |
| PEG | 4.6 |
| Analyst target | 7.5 |
- ▸Forward P/E: 12.3x
- ▸PEG: 1.93
INFY · Why this verdict
Why Infosys (INFY) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.4/10
ConfidenceHIGH
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Infosys carries genuine quality in its returns and margins — 31% return on equity, 16% net margins, and a Piotroski score of 7 out of 9 — but a confirmed death cross, price below the 200-day moving average with the slope falling at -4.1% per 30 days, a debt-to-equity ratio of 9.8, and soft growth with mostly in-line earnings delivery create a set of technical and fundamental headwinds that argue against adding capital until the trend reverses.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
A debt-to-equity ratio of 9.8 is explicitly penalized in the risk assessment, indicating the business carries substantial financial leverage that reduces its ability to absorb a revenue or margin deterioration without creating earnings pressure beyond the operating level. Bear case | Debt-to-equity should decline below 5.0x over the next 4 quarters for the leverage concern to be materially reduced. | →Stable |
| CounterHigh financial leverage in a technology services business can reflect infrastructure or acquisition financing that is being steadily amortized; if cash generation is sufficient to service the debt without constraining investment, the headline ratio may be more alarming than the underlying economics justify. | ||
The business generates 31% return on equity and 16% net margins, carries a Piotroski financial strength score of 7 out of 9, and ranks in the top tier of its peer group on margins — demonstrating that the underlying franchise produces strong returns even in a difficult technical environment. Quality breakdown | Return on equity should remain above 25% and net margins above 12% for 4 consecutive quarters if the quality thesis holds. | →Stable |
| CounterA debt-to-equity ratio of 9.8 means the equity base is thin relative to the debt load, which can arithmetically inflate the return-on-equity figure; if leverage is unwound or if earnings soften, the headline return metric can fall sharply, making the quality case less compelling than it appears. | ||
A confirmed death cross has triggered a hard block on entry, the price is below the 200-day moving average with the moving average slope declining at -4.1% over 30 days, and on-balance volume is in a distribution pattern — together these signals indicate the stock is in a confirmed downtrend that has not yet shown signs of reversal. Momentum breakdown | Price should recross above its 200-day moving average and on-balance volume should turn to an accumulation trend for the downtrend thesis to be falsified. | →Stable |
| CounterA death cross at the bottom of a lengthy price decline can sometimes mark a final washout; if fundamentals stabilize, mean-reversion buyers may absorb selling pressure and create a reversal before the moving average crossover formally turns positive. | ||
Three of the four most recent quarterly results came in essentially at consensus — inline — with only the most recent quarter delivering a meaningful beat; this pattern of narrow, unsurprising earnings delivery reflects a business growing at a modest pace that leaves little room for positive earnings revisions or multiple expansion driven by upside surprise. Earnings | EPS surprise should exceed 5% for at least 2 consecutive quarters and revenue growth should accelerate above 10% year-over-year for the growth narrative to regain traction. | →Stable |
| CounterConsistent in-line delivery can reflect conservative guidance discipline that reduces downside risk; a business that precisely meets expectations is predictable, which may attract valuation support even absent consistent upside beats, particularly during a period of macro uncertainty. | ||
A debt-to-equity ratio of 9.8 is explicitly penalized in the risk assessment, indicating the business carries substantial financial leverage that reduces its ability to absorb a revenue or margin deterioration without creating earnings pressure beyond the operating level.
→StableBear case
- Expectation
- Debt-to-equity should decline below 5.0x over the next 4 quarters for the leverage concern to be materially reduced.
CounterHigh financial leverage in a technology services business can reflect infrastructure or acquisition financing that is being steadily amortized; if cash generation is sufficient to service the debt without constraining investment, the headline ratio may be more alarming than the underlying economics justify.
The business generates 31% return on equity and 16% net margins, carries a Piotroski financial strength score of 7 out of 9, and ranks in the top tier of its peer group on margins — demonstrating that the underlying franchise produces strong returns even in a difficult technical environment.
→StableQuality breakdown
- Expectation
- Return on equity should remain above 25% and net margins above 12% for 4 consecutive quarters if the quality thesis holds.
CounterA debt-to-equity ratio of 9.8 means the equity base is thin relative to the debt load, which can arithmetically inflate the return-on-equity figure; if leverage is unwound or if earnings soften, the headline return metric can fall sharply, making the quality case less compelling than it appears.
A confirmed death cross has triggered a hard block on entry, the price is below the 200-day moving average with the moving average slope declining at -4.1% over 30 days, and on-balance volume is in a distribution pattern — together these signals indicate the stock is in a confirmed downtrend that has not yet shown signs of reversal.
→StableMomentum breakdown
- Expectation
- Price should recross above its 200-day moving average and on-balance volume should turn to an accumulation trend for the downtrend thesis to be falsified.
CounterA death cross at the bottom of a lengthy price decline can sometimes mark a final washout; if fundamentals stabilize, mean-reversion buyers may absorb selling pressure and create a reversal before the moving average crossover formally turns positive.
Three of the four most recent quarterly results came in essentially at consensus — inline — with only the most recent quarter delivering a meaningful beat; this pattern of narrow, unsurprising earnings delivery reflects a business growing at a modest pace that leaves little room for positive earnings revisions or multiple expansion driven by upside surprise.
→StableEarnings
- Expectation
- EPS surprise should exceed 5% for at least 2 consecutive quarters and revenue growth should accelerate above 10% year-over-year for the growth narrative to regain traction.
CounterConsistent in-line delivery can reflect conservative guidance discipline that reduces downside risk; a business that precisely meets expectations is predictable, which may attract valuation support even absent consistent upside beats, particularly during a period of macro uncertainty.
Per-dimension breakdown
Quality
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 10.0 |
| Gross margin | 1.9 |
| Op margin | 8.4 |
| Net margin | 8.2 |
| Current ratio | 6.9 |
| FCF quality | 6.8 |
| Moat | 5.4 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 31%
- ▸Strong margins: 16%
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
4.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.1 |
| EPS growth | 4.4 |
Momentum
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 1.6 |
| OBV | 10.0 |
| MA position | 1.0 |
| Volume | 0.0 |
- ▸Capitulation risk (RSI 24, below 200MA)
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -4.1%/30d — confirmed downtrend
Sentiment
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.8 |
| Analyst rating | 7.0 |
| Price target | 9.2 |
- ▸LLM news sentiment: +0.57 (n=3)
- ▸Analyst upside: 41%
Insider
3.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 5.0 |
- ▸Notable insider selling — $119,392,376 (0.270% of mkt cap)
Peer rank
4.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.6 |
| quality rank | 8.1 |
| growth rank | 4.5 |
- ▸Best-in-class margins
Technical
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.7 |
| support resistance | 9.3 |
| 52w position | 0.0 |
Risk (lower is worse)
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.9 |
| days to cover | 0.4 |
| volatility | 2.0 |
| put call | 2.9 |
| implied vol | 3.5 |
| max pain risk | 7.0 |
| beta | 10.0 |
| debt equity | 0.0 |
- ▸Elevated put/call: 1.57
Catalyst
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 4.2 |
| dividend safety | 6.0 |
| news activity | 7.0 |
- ▸Dividend: 473.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- ASYMMETRY:2.8>=1.5
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:28d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.1<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
2.75
Upside
+23.0%
Downside
8.4%
Sizing output
AVOID
SetupFALLING_KNIFE — Death cross, below all MAs, RSI 24, MACD bearish
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 3.9 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Sentiment at 7.9) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.1<4.5, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 2.75 — supplementary context, not the trigger for this path.
The strongest dimensions are Sentiment at 7.9, Quality at 7.3, and Value at 6.5; the weakest are Momentum at 3.1, Insider at 3.3, and Peer rank at 4.1. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 2.75 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1The business generates 31% return on equity and 16% net margins, carries a Piotroski financial strength score of 7 out of 9, and ranks in the top tier of its peer group on margins — demonstrating that the underlying franchise produces strong returns even in a difficult technical environment.
Trip ifReturn on equity falls below 20% for 2 consecutive quarters.
- P2A confirmed death cross has triggered a hard block on entry, the price is below the 200-day moving average with the moving average slope declining at -4.1% over 30 days, and on-balance volume is in a distribution pattern — together these signals indicate the stock is in a confirmed downtrend that has not yet shown signs of reversal.
Trip ifPrice closes above the 200-day moving average for 10 consecutive trading days, reversing the confirmed downtrend.
- P3A debt-to-equity ratio of 9.8 is explicitly penalized in the risk assessment, indicating the business carries substantial financial leverage that reduces its ability to absorb a revenue or margin deterioration without creating earnings pressure beyond the operating level.
Trip ifDebt-to-equity ratio falls below 5.0x.
- P4Three of the four most recent quarterly results came in essentially at consensus — inline — with only the most recent quarter delivering a meaningful beat; this pattern of narrow, unsurprising earnings delivery reflects a business growing at a modest pace that leaves little room for positive earnings revisions or multiple expansion driven by upside surprise.
Trip ifEPS surprise exceeds 5% for 2 consecutive quarters, breaking the pattern of in-line delivery.