Accenture (ACN) AI Stock Analysis

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Accenture

(NYSE:ACN)

77Outperform

Accenture's overall stock score reflects its robust financial performance and strategic growth initiatives, particularly in Gen AI and managed services. The technical analysis suggests some caution due to current market positioning, while valuation remains attractive within the industry context. The earnings call underscores strong growth prospects despite some operational and macroeconomic challenges.

Positive Factors

AI Initiatives

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

Market Position

Accenture is viewed as a best-in-class operator that will likely take increasing market share when the cycle turns due to its execution and leadership position in next-gen tech solutions like GenAI.

Revenue Growth

Managed services are expected to drive revenue growth as clients continue to prioritize customer experience.

Negative Factors

Federal Services Challenges

ACN's Federal Services unit faces 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.

Growth Outlook

The price target for ACN has been lowered due to a more uncertain growth outlook, reflecting a cautious stance amid macroeconomic concerns.

US Government Spending

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

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

Market Cap

$191.14B

Dividend Yield1.86%

Average Volume (3M)3.87M

Price to Earnings (P/E)25.2

Beta (1Y)0.73

Revenue Growth4.10%

EPS Growth9.78%

CountryUS

Employees801,000

SectorTechnology

Sector Strength67

IndustryInformation Technology Services

Share Statistics

EPS (TTM)2.82

Shares Outstanding626,025,800

10 Day Avg. Volume2,689,978

30 Day Avg. Volume3,869,749

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.16

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit10.47

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$358.42

Price Target Upside16.48% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering20

Accenture Business Overview & Revenue Model

Company DescriptionAccenture plc, a professional services company, provides strategy and consulting, interactive, and technology and operations services worldwide. The company offers application services, including agile transformation, DevOps, application modernization, enterprise architecture, software and quality engineering, data management, intelligent automation comprises robotic process automation, natural language processing, and virtual agents, and liquid application management services, as well as program, project, and service management services; strategy consulting services; critical data elements, data management and governance, data platform and architecture, product-based organization and skills, business adoption, and value realization services; engineering, and research and development digitization; smart connected product design and development; product platform engineering and modernization; product as-a-service enablement; products related to production and operations; autonomous robotics systems; the digital transformation of capital projects; and digital industrial workforce solutions. It also provides data-enabled operating models; technology consulting and artificial intelligence services; services related to talent and organization/human potential; digital commerce; infrastructure services, such as hybrid cloud, network, digital workplace and collaboration, service and experience management, infrastructure as code, and managed edge and IoT devices; cyber defense, applied cybersecurity, managed security, OT security, security strategy and risk, and industry security products; services related to technology innovation; and intelligent automation services. In addition, the company offers cloud, ecosystem, marketing, supply chain management, zero-based budgeting, customer experience, finance consulting, mergers and acquisitions, and sustainability services. Accenture plc was founded in 1951 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 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 Financial Statement Overview

Summary

Accenture demonstrates strong financial health, with consistent revenue and profit growth, a low debt-to-equity ratio, and impressive returns on equity. Despite a decline in free cash flow growth, the company is financially well-positioned within its industry.

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.

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

Accenture Technical Analysis

Technical Analysis Sentiment

Negative

Last Price307.71

Price Trends

50DMA

309.95

Negative

100DMA

337.42

Negative

200DMA

340.17

Negative

Market Momentum

MACD

-1.28

Negative

RSI

53.60

Neutral

STOCH

88.84

Negative

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 307.71 is above the 20-day moving average (MA) of 291.92, below the 50-day MA of 309.95, and below the 200-day MA of 340.17, indicating a neutral trend. The MACD of -1.28 indicates Negative momentum. The RSI at 53.60 is Neutral, neither overbought nor oversold. The STOCH value of 88.84 is Negative, 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 (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INFY	80 Outperform	$74.10B	23.44	29.00%	2.32%	3.85%	-0.38%
ACN	77 Outperform	$191.14B	25.19	27.26%	1.86%	4.10%	9.78%
CTSH	76 Outperform	$38.30B	16.36	16.61%	1.56%	4.09%	14.05%
IBM	68 Neutral	$228.21B	42.24	21.91%	2.68%	1.23%	-33.87%
WIT	67 Neutral	$30.08B	19.52	16.91%	2.12%	-2.83%	106.18%
Sector *	60 Neutral	$10.93B	10.46	-6.70%	2.99%	7.54%	-12.22%
FIS	54 Neutral	$41.47B	55.61	5.25%	1.88%	-17.38%	―

* Technology Sector Average

Performance Comparison

ACN

Accenture

303.80

-1.43

-0.47%

CTSH

Cognizant

77.91

11.29

16.95%

FIS

Fidelity National Info

75.89

2.97

4.07%

INFY

Infosys

17.77

1.11

6.66%

IBM

International Business Machines

249.12

86.22

52.93%

WIT

Wipro

2.89

0.19

7.04%

Accenture Earnings Call Summary

Earnings Call Date:Mar 20, 2025

(Q2-2025)

% Change Since: -4.70%|

Next Earnings Date:Jun 20, 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.

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.