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Accenture (ACN)
NYSE:ACN
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Accenture
(NYSE:ACN)76Outperform
Positive Factors
AI Capabilities
Accenture has a long runway in AI and can leverage its intellectual property for more engagements.
Analyst Recommendation
The analyst's recommendation on ACN has been upgraded from Peer Perform to Outperform, indicating confidence in the stock's potential.
Negative Factors
Economic Downturn Risks
The potential global recession could disrupt the business activities of Accenture's clients as well as the company itself, potentially leading to layoffs and organizational restructurings.
Accenture (ACN) vs. S&P 500 (SPY)
Market Cap
$217.98B
Dividend Yield1.59%
Average Volume (3M)2.83M
Price to Earnings (P/E)29.2
Beta (1Y)0.84
Revenue Growth2.75%
EPS Growth10.53%
CountryUS
Employees774,000
SectorTechnology
Sector Strength48
IndustrySoftware
Share Statistics
EPS (TTM)11.93
Shares Outstanding625,479,900
10 Day Avg. Volume2,906,202
30 Day Avg. Volume2,826,049
Financial Highlights & Ratios
PEG Ratio2.77
Price to Book (P/B)N/A
Price to Sales (P/S)3.25
Price to Cash Flow (P/CF)52.80
P/FCF Ratio60.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$398.29Price Target Upside15.19% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering18
Accenture Business Overview & Revenue Model
Company DescriptionAccenture Plc is a multinational professional services company, which provides management consulting, technology, and outsourcing services. The company generates revenues from five industry groups, including Communications, Media, and Technology; Financial Services; Health and Public Service; Products; and Resources. The company was founded in 1989 and is based in Dublin, Ireland.
How the Company Makes MoneyAccenture generates revenue primarily through its five main business segments: Communications, Media & Technology; Financial Services; Health & Public Service; Products; and Resources. It provides a range of services including management consulting, technology integration, and outsourcing solutions. Accenture earns money by charging fees for its consulting and implementation services, often structured as time-based billing or project-based fees. Additionally, the company has partnerships with leading technology providers such as Microsoft, SAP, and Oracle, which enhance its service offerings and contribute to revenue through technology integration projects and cloud services. Accenture's focus on digital, cloud, and security solutions also positions it for growth in modern business environments, further driving its revenue.
Accenture Financial Statement Overview
Summary
Accenture shows strong financial performance with consistent revenue and profitability growth. The company maintains a stable balance sheet with low leverage and effective cash flow management, indicating robust financial health.Income Statement
Accenture shows strong financial performance with a consistent increase in revenue and profitability. The TTM gross profit margin is 32.45%, and the net profit margin is 7.97%, both indicating robust profitability. The revenue growth rate from 2023 to TTM is 3.50%, showing a stable upward trend. The EBIT margin is 15.17%, and the EBITDA margin is 17.72%, reflecting effective cost management.85
Very Positive
Balance Sheet
The balance sheet is stable with a manageable debt-to-equity ratio of 0.20, indicating low leverage risk. The return on equity stands at 18.13%, showing strong returns to shareholders. The equity ratio of 48.75% demonstrates a balanced capital structure. Overall, Accenture maintains a solid financial position with adequate equity and low debt levels.78
Positive
Cash Flow
Cash flow performance is strong with an operating cash flow to net income ratio of 1.82, indicating efficient cash generation relative to net income. Free cash flow has grown by 4.87% from the previous period, reflecting solid cash flow management. The free cash flow to net income ratio is 1.71, highlighting effective conversion of earnings into cash flow.80
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 66.36B | 64.90B | 64.11B | 61.59B | 50.53B | 44.33B | Gross Profit |
| 21.55B | 21.16B | 20.73B | 19.70B | 16.36B | 13.98B | EBIT |
| 10.07B | 9.60B | 8.81B | 9.37B | 7.62B | 6.51B | EBITDA |
| 11.76B | 11.19B | 10.59B | 10.55B | 7.62B | 7.99B | Net Income Common Stockholders |
| 7.57B | 7.26B | 6.87B | 6.88B | 5.91B | 5.11B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 5.01B | 5.01B | 9.05B | 7.89B | 8.17B | 8.51B | Total Assets |
| 55.93B | 55.93B | 51.25B | 47.26B | 43.18B | 37.08B | Total Debt |
| 4.12B | 4.12B | 3.15B | 3.33B | 3.51B | 3.49B | Net Debt |
| -883.92M | -883.92M | -5.90B | -4.56B | -4.66B | -4.93B | Total Liabilities |
| 26.76B | 26.76B | 24.79B | 24.52B | 23.08B | 19.58B | Stockholders Equity |
| 28.29B | 28.29B | 25.69B | 22.11B | 19.53B | 17.00B |
| Cash Flow | Free Cash Flow | ||||
| 9.06B | 8.61B | 9.00B | 8.82B | 8.40B | 7.62B | Operating Cash Flow |
| 9.65B | 9.13B | 9.52B | 9.54B | 8.98B | 8.22B | Investing Cash Flow |
| -6.59B | -7.06B | -2.62B | -4.26B | -4.31B | -1.89B | Financing Cash Flow |
| -1.76B | -6.06B | -5.65B | -5.31B | -4.93B | -4.05B |
Accenture Technical Analysis
Negative
345.78
Price Trends
366.04
Negative
362.45
Negative
339.80
Positive
Market Momentum
-6.08
Positive
28.55
Positive
8.45
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ACN, the sentiment is Negative. The current price of 345.78 is below the 20-day moving average (MA) of 375.73, below the 50-day MA of 366.04, and above the 200-day MA of 339.80, indicating a neutral trend. The MACD of -6.08 indicates Positive momentum. The RSI at 28.55 is Positive, neither overbought nor oversold. The STOCH value of 8.45 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ACN.
Accenture Risk Analysis
Accenture disclosed 21 risk factors in its most recent earnings report. Accenture reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Accenture Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $41.42B | 18.58 | 16.21% | 1.45% | 1.98% | 7.16% | |
76 Outperform | $217.98B | 29.21 | 25.93% | 1.59% | 2.75% | 10.53% | |
75 Outperform | $38.28B | 30.63 | 92.24% | ― | 6.10% | 44.57% | |
69 Neutral | $11.69B | 25.33 | 12.52% | ― | 0.80% | 10.05% | |
67 Neutral | $234.79B | 39.40 | 22.06% | 2.67% | 1.45% | -20.56% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% | |
47 Neutral | $3.33B | 267.98 | -2.51% | ― | -5.65% | 78.20% |
* Technology Sector Average
Performance Comparison
ACN
Accenture
345.78
-24.92
-6.72%
CTSH
Cognizant
83.74
7.16
9.35%
EPAM
Epam Systems
198.01
-108.49
-35.40%
IT
Gartner
482.06
21.83
4.74%
IBM
International Business Machines
253.21
67.51
36.35%
DXC
DXC Technology
17.99
-2.21
-10.94%
Accenture Earnings Call Summary
Earnings Call Date: Dec 19, 2024 | % Change Since: -0.10% | Next Earnings Date: Mar 20, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong start to FY 2025 with notable revenue growth, significant bookings, and EPS improvement. However, challenges such as flat operating margins and competitive pricing pressures were highlighted. Despite these challenges, the company's strategic positioning and workforce growth, alongside positive recognition and brand value increases, suggest a positive outlook.Highlights
Strong Revenue Growth
Accenture delivered revenue of $17.7 billion in Q1, representing a 9% increase in U.S. dollars and 8% in local currency, exceeding the top end of their guided range by approximately $240 million.
Significant Bookings
The company achieved $18.7 billion in new bookings, including a milestone $1.2 billion in GenAI bookings and approximately $500 million in revenue.
EPS Growth
Earnings per share grew 10% over the adjusted EPS from Q1 FY '24, reaching $3.59.
Recognition and Brand Value
Accenture was recognized by Fortune as one of the world's best workplaces, moving from #10 to #6, and achieved its highest brand value to date on Interbrand's Best Global Brands List with a value of $21.9 billion, ranking #31.
Increase in Workforce
The data and AI workforce increased to approximately 69,000, with a target of 80,000 by the end of FY 2026. Accenture added about 24,000 people in Q1, reflecting business momentum.
Lowlights
Flat Operating Margin
The operating margin was flat compared to the adjusted operating margin last year, indicating no improvement in this key metric.
Challenges in EMEA
Despite growth in certain areas, the EMEA region faced challenges with a decline in Banking & Capital Markets and revenue declines in France, Singapore, and Australia.
Competitive Pricing Environment
The market remains very competitive with lower pricing across the business, consistent with previous quarters.
Company Guidance
During Accenture's Q1 2025 earnings call, key guidance metrics were provided for the upcoming fiscal periods. For Q2, revenue is expected to range between $16.2 billion and $16.8 billion, reflecting a 5% to 9% growth in local currency, with a negative 2.5% impact from foreign exchange. For the full fiscal year 2025, revenue growth is projected at 4% to 7% in local currency, with an inorganic contribution exceeding 3%. Operating margin is anticipated to expand by 10 to 30 basis points, reaching 15.6% to 15.8%, while the effective tax rate is expected to range from 22.5% to 24.5%. Diluted earnings per share are forecasted between $12.43 and $12.79, representing a 4% to 7% increase. Free cash flow is projected to be between $8.8 billion and $9.5 billion, with at least $8.3 billion returned to shareholders through dividends and share repurchases.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.