Accenture (ACN) AI Stock Analysis

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Accenture

(NYSE:ACN)

Rating:78Outperform

Price Target:

$355.00

▲(15.87%Upside)

Accenture's strong financial performance and positive earnings call outlook are significant strengths, offset by a mixed technical analysis and high valuation. The company's strategic focus on Gen AI and managed services supports its growth potential, despite some federal revenue uncertainties.

Positive Factors

AI Initiatives

AI initiatives aim to drive future growth in the long term for Accenture PLC (ACN).

Diversification

Accenture should benefit from diversification despite meaningful variation in discretionary spending patterns by vertical.

Growth Guidance

Longer-duration deal conversion cushions macro softness and likely helps management raise the lower-end of the FY25 growth guidance by +100bps to +6-7% y/y.

Negative Factors

Federal Services Challenges

ACN's Federal Services unit contributes c.8% of revenue, with potential challenges including slower sales cycles, contract cancellations, and reduced government spending, creating headwinds for ACN’s near-term growth in the US Federal market.

Government Spending

The ongoing US government crackdown on spending poses a notable risk to ACN.

Investor Sentiment

Recent investor conversations suggest investor sentiment leans negative on ACN, with a 30-day change in short interest ticking up.

Accenture (ACN) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$196.78B

Dividend Yield1.9%

Average Volume (3M)2.73M

Price to Earnings (P/E)25.9

Beta (1Y)0.71

Revenue Growth4.10%

EPS Growth9.78%

CountryUS

Employees801,000

SectorTechnology

Sector Strength81

IndustryInformation Technology Services

Share Statistics

EPS (TTM)N/A

Shares Outstanding626,025,800

10 Day Avg. Volume2,684,704

30 Day Avg. Volume2,730,354

Financial Highlights & Ratios

PEG Ratio107.66

Price to Book (P/B)7.95

Price to Sales (P/S)0.00

P/FCF Ratio22.70

Enterprise Value/Market Cap0.90

Enterprise Value/Revenue0.68

Enterprise Value/Gross Profit8.22

Enterprise Value/Ebitda3.84

Forecast

1Y Price Target

$349.82

Price Target Upside14.18% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering17

Accenture Business Overview & Revenue Model

Company DescriptionAccenture (ACN) is a global professional services company with leading capabilities in digital, cloud, and security. Combining unmatched experience and specialized skills across more than 40 industries, Accenture offers Strategy and Consulting, Interactive, Technology, and Operations services—all powered by the world's largest network of Advanced Technology and Intelligent Operations centers. With 738,000 employees serving clients in more than 120 countries, Accenture brings continuous innovation to help clients improve their performance and create lasting value across their enterprises.

How the Company Makes MoneyAccenture makes money primarily through its diverse service offerings across several key areas: Strategy & Consulting, Interactive, Technology, and Operations. The company generates revenue by providing consulting services, implementing technology solutions, and managing operations for its clients. Accenture charges its clients for the time and expertise of its consultants and for the execution of projects, which often involve designing and deploying technology systems. Additionally, they earn from strategic partnerships and alliances with major technology providers like Microsoft, Oracle, and SAP, which help them to enhance their service offerings and reach. The company's ability to integrate cutting-edge technologies into their service deliveries, such as artificial intelligence, cloud computing, and cybersecurity, also contributes significantly to its revenue streams.

Accenture Key Performance Indicators (KPIs)

Any

New Bookings by Type

New Bookings by Type
Highlights the types of services or products that are generating new business, offering insight into future revenue streams and strategic focus areas.

Chart InsightsAccenture's Managed Services bookings have shown robust growth, significantly outpacing Consulting. This aligns with the company's strategic focus on technology managed services, which saw double-digit growth. Despite federal revenue uncertainties, Accenture's investments in Gen AI and strategic acquisitions are driving strong demand and bookings, as evidenced by a $1.4 billion milestone in Gen AI. The company's commitment to expanding its data and AI workforce and enhancing employee skills underscores its focus on sustainable growth, even amid economic and geopolitical challenges.

Data provided by:

Main Street Data

Accenture Earnings Call Summary

Earnings Call Date:Jun 20, 2025

(Q2-2025)

% Change Since: -5.11%|

Next Earnings Date:Sep 25, 2025

Earnings Call Sentiment Neutral

Accenture delivered strong revenue and bookings growth, driven by strategic investments in Gen AI and managed services, along with significant recognition as an industry leader. However, the company faces challenges with federal revenue uncertainty and operating margin pressures, amidst an overall elevated level of economic and geopolitical uncertainty.

Q2-2025 Updates

Positive Updates

Strong Bookings and Revenue Growth

Accenture reported quarterly bookings of $20.9 billion, with 32 clients having quarterly bookings greater than $100 million. Revenue grew by 8.5% in local currency, reaching $16.7 billion, which was at the top end of their guided range.

Gen AI Milestone

Accenture achieved a milestone in Gen AI with $1.4 billion in new bookings and approximately $600 million in revenue this quarter.

Recognition and Industry Leadership

Accenture was recognized as one of the World's Most Ethical Companies for the 18th year in a row and ranked number one in its industry for the 12th consecutive year on Fortune's list of the World's Most Admired Companies.

Investment in Strategic Areas and Talent

Accenture invested over $250 million in strategic acquisitions and over 15 million training hours for its employees to advance skills in solutions and technology, including Gen AI.

Strong Performance in Managed Services

Managed Services revenue grew 8% in U.S. dollars and 11% in local currency, driven by double-digit growth in technology managed services.

Negative Updates

Federal Revenue Uncertainty

The slowdown in new procurement actions and contract assessments by the U.S. General Service Administration has created uncertainty in Accenture's federal business, which represented approximately 8% of global revenue.

Operating Margin Contraction

Operating margin contracted by 20 basis points compared to adjusted operating margin last year, largely due to higher subcontractor costs.

Elevated Economic and Geopolitical Uncertainty

Accenture noted an elevated level of uncertainty in the global economic and geopolitical environment impacting client activities.

Company Guidance

During Accenture's Second Quarter Fiscal 2025 Earnings Conference Call, the company reported strong performance with $20.9 billion in bookings and revenue of $16.7 billion, reflecting an 8.5% growth in local currency. The operating margin slightly contracted by 20 basis points compared to the previous year, while earnings per share (EPS) grew by 2% over Q2 FY24. Accenture highlighted significant investments, including over $250 million in six strategic acquisitions and approximately 15 million training hours for their workforce. They also expanded their data and AI workforce to around 72,000, progressing towards a goal of 80,000 by FY26. Despite some challenges in the federal sector due to procurement slowdowns and contract reviews, the company continues to see strong demand for large-scale transformations, particularly in areas like Gen AI, where they achieved $1.4 billion in new bookings and around $600 million in revenue this quarter. Looking forward, Accenture projects 5% to 7% revenue growth for the full fiscal year 2025, maintaining a focus on strategic investments and sustainable growth.

Accenture Financial Statement Overview

Summary

Accenture demonstrates robust financial health with consistent revenue growth, strong profit margins, and effective cash management. Despite a decline in free cash flow growth, the company maintains a solid balance sheet with low leverage and high returns on equity, indicating financial stability and sound risk management.

Income Statement

Very Positive

Accenture shows strong performance with consistent revenue growth, evidenced by a 4.5% increase in the TTM compared to the previous year. The gross profit margin stands at 32.2%, and the net profit margin at 11.4%, indicating efficient cost management and profitability. EBIT and EBITDA margins are healthy at 15.3% and 16.9%, respectively, which reflects operational efficiency. Overall, the company demonstrates a robust income statement with a strong growth trajectory.

Balance Sheet

Very Positive

The balance sheet is solid with a low debt-to-equity ratio of 0.20, indicating low financial leverage and sound risk management. The return on equity is impressive at 26.3%, showcasing the company's ability to generate returns on shareholder investments. The equity ratio is 48.9%, emphasizing a healthy balance between equity and total assets, which points to financial stability. Overall, Accenture maintains a strong and stable balance sheet.

Cash Flow

Very Positive

Accenture has a positive cash flow performance, with a free cash flow of $6.19 billion in the TTM period. Although the free cash flow growth rate has declined by 28.1%, the company maintains a high operating cash flow to net income ratio of 0.85, indicating robust cash generation relative to reported earnings. The free cash flow to net income ratio is 0.81, highlighting effective cash management. Despite some decline in free cash flow growth, Accenture's cash flow position remains strong.

TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Breakdown
Income Statement		Total Revenue
67.22B	64.90B	64.11B	61.59B	50.53B	44.33B
	Gross Profit
21.64B	21.16B	20.73B	19.70B	16.36B	13.98B
	EBIT
10.27B	9.60B	8.81B	9.37B	7.62B	6.51B
	EBITDA
11.84B	11.19B	10.59B	10.55B	7.62B	7.99B
	Net Income Common Stockholders
7.68B	7.26B	6.87B	6.88B	5.91B	5.11B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
8.50B	5.01B	9.05B	7.89B	8.17B	8.51B
	Total Assets
59.87B	55.93B	51.25B	47.26B	43.18B	37.08B
	Total Debt
8.06B	4.12B	3.15B	3.33B	3.51B	3.49B
	Net Debt
-430.11M	-883.92M	-5.90B	-4.56B	-4.66B	-4.93B
	Total Liabilities
29.69B	26.76B	24.79B	24.52B	23.08B	19.58B
	Stockholders Equity
29.25B	28.29B	25.69B	22.11B	19.53B	17.00B
Cash Flow		Free Cash Flow
9.75B	8.61B	9.00B	8.82B	8.40B	7.62B
	Operating Cash Flow
10.41B	9.13B	9.52B	9.54B	8.98B	8.22B
	Investing Cash Flow
-4.79B	-7.06B	-2.62B	-4.26B	-4.31B	-1.89B
	Financing Cash Flow
-2.10B	-6.06B	-5.65B	-5.31B	-4.93B	-4.05B

Accenture Technical Analysis

Technical Analysis Sentiment

Negative

Last Price306.38

Price Trends

50DMA

306.25

Positive

100DMA

326.08

Negative

200DMA

339.11

Negative

Market Momentum

MACD

0.36

Positive

RSI

40.97

Neutral

STOCH

13.14

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 306.38 is below the 20-day moving average (MA) of 315.29, above the 50-day MA of 306.25, and below the 200-day MA of 339.11, indicating a neutral trend. The MACD of 0.36 indicates Positive momentum. The RSI at 40.97 is Neutral, neither overbought nor oversold. The STOCH value of 13.14 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 (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INFY	80 Outperform	$78.66B	24.47	29.00%	2.76%	3.85%	-0.38%
ACN	78 Outperform	$196.78B	25.94	27.26%	1.90%	4.10%	9.78%
CTSH	76 Outperform	$39.29B	16.78	16.61%	1.55%	4.09%	14.05%
IBM	76 Outperform	$263.07B	48.69	21.91%	2.37%	1.23%	-33.87%
WIT	71 Outperform	$31.87B	20.39	16.62%	1.02%	-2.83%	106.18%
FIS	71 Outperform	$42.26B	50.32	5.25%	1.99%	-9.12%	―
Sector *	62 Neutral	$11.92B	10.03	-7.37%	3.70%	7.32%	-8.25%

* Technology Sector Average

Performance Comparison

ACN

Accenture

306.38

5.57

1.85%

CTSH

Cognizant

79.14

12.02

17.91%

FIS

Fidelity National Info

80.44

5.41

7.21%

INFY

Infosys

18.43

0.55

3.08%

IBM

International Business Machines

283.21

114.40

67.77%

WIT

Wipro

2.98

0.08

2.76%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.