Infosys (NYSE:INFY) recently announced that it has signed a definitive agreement to acquire the Denmark-based technology and consulting firm in the life sciences industry – BASE Life Science. The Indian IT services provider expects to complete the transaction during its second quarter of fiscal 2023.
Founded in 2007, privately held BASE is one of the leading life science technology consulting companies in Europe. The company currently employees about 200 industry experts and has offices in Denmark, Switzerland, France, Spain, Italy, the United Kingdom and Germany. Through optimizing technology and business processes, BASE's experienced team helps organizations within the life science industry in Customer Engagement, Quality, Regulatory, Compliance and Clinical data management.
The acquisition of BASE will scale Infosys' digital transformation capabilities with cloud-based solutions for the life science industry. Backed by a team of data science specialists with commercial capabilities, BASE will further strengthen INFY's medical, digital marketing, clinical, regulatory and quality know-how capabilities.
Therefore, the buyout will be a strategic fit for the company as BASE's product portfolio complements Infosys' existing digital portfolio. The agency will be part of Infosys' Life Science business segment, which registered year-over-year revenue growth of 15.1% in the last reported quarter and contributed 6.6% to total sales.
With enhanced capabilities, Infosys will be able to provide better cloud-based digital platforms and artificial intelligence-based data analyzing tools, which will help its customers speed up clinical trials and scale drug development.
Infosys has been reinforcing its digital transformation capabilities to expand and solidify its position in the highly competitive environment. It enables its clients across more than 45 countries to create and execute strategies for their digital transformation. Such efforts in the digital transformation business will aid the company in competing with peers like Accenture and Cognizant.
In April this year, INFY completed the acquisition of the Germany-based digital communication and commerce agency – oddity. With this buyout, the Indian IT services provider intends to strengthen digital marketing skills and aid in navigating digital transformation for its clients globally.
Over the last few quarters, Infosys collaborated with several bigwigs to fortify its portfolio and market share. To bolster the digital, cloud, legacy modernization and automation businesses, Infosys forged strategic tie-ups with Archrock, Majesco, Britvic, ArcelorMittal, Google, Adobe, Microsoft, Amazon Web Services and salesforce.com. To drive engineering services, the company partnered with General Electric to deliver solutions in the field of automation, digital trends and the Internet of Things.
However, Infosys is grappling with increasing anti-outsourcing sentiments in certain countries. Higher subcontractor costs and the company's compensation revision with a higher variable pay and incentives are weighing on margins. Currency volatility between the Indian rupee and the U.S. dollar remains a major concern.
Zacks Rank & Stocks to Consider
Currently, Infosys carries a Zacks Rank #4 (Sell). Shares of INFY have plunged 28.5% year to date ("YTD").
Some better-ranked stocks worth considering from the broader technology sector are Broadcom (NASDAQ:AVGO), Synopsys (NASDAQ:SNPS) and CrowdStrike (NASDAQ:CRWD). Broadcom and Synopsys each sport a Zacks Rank #1 (Strong Buy), while CrowdStrike carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Broadcom's third-quarter fiscal 2022 earnings has been revised upward by 9.9% to $9.62 per share over the past 60 days. For fiscal 2022, the Zacks Consensus Estimate for Broadcom's earnings has moved north by 10 cents to $37.06 per share in the past 30 days.
Broadcom's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 2.2%. Shares of AVGO have plunged 27.6% YTD.
The Zacks Consensus Estimate for Synopsys' third-quarter fiscal 2022 earnings has been revised upward by 25.3% to $1.93 per share over the past 60 days. For fiscal 2022, earnings estimates have moved north by 7.2% to $8.47 per share in the past 60 days.
Synopsys' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 2.7%. Shares of SNPS have decreased 17.8% YTD.
The Zacks Consensus Estimate for CrowdStrike's second-quarter fiscal 2023 earnings has been revised upward by three cents to 29 cents per share in the past 60 days. For fiscal 2023, earnings estimates have moved north by a penny to $1.24 per share in the past 30 days.
CrowdStrike's earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 44.3%. Shares of CRWD have plunged 14.6% YTD.
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