Company Reports

Wide-moat Accenture reported a mixed quarter with a tough macro environment continuing to negatively impact discretionary IT spending. While we expect Accenture to attract a sizable portion of IT spending when macro conditions normalize and discretionary IT spending accelerates, we don’t see a turnaround for the remainder of fiscal 2024. Despite the mixed results, we are raising our fair value estimate for the firm to $292 from $271 primarily due to changes to our working capital assumptions and the time value of money. While investors were disappointed with Accenture’s financial results, sending the company’s shares down more than 8% following the earnings report, we still view Accenture as overvalued.

Accenture is one of the largest IT-services companies in the world, providing both consulting and outsourcing capabilities. We think that Accenture’s growth will remain at a healthy and gradual pace, thanks to the persistence of digital transformation trends. With the company's prominent reputation, which we believe to be crucial to the consulting business, and its proven ability to bring expertise to a gamut of enterprise issues, we are confident Accenture will maintain its wide economic moat.

Wide-moat Accenture reported a solid EPS beat in the first quarter, while also surpassing revenue FactSet consensus even with consulting revenue remaining muted due to their more discretionary nature. We are increasing our fair value estimate for Accenture to $271 per share from $247 per share, as we are baking in greater growth in outer years of our explicit forecast. While we don't bake in a turnaround in IT services discretionary spending for the remaining fiscal year, we have more confidence that, when such a rebound occurs, Accenture will be able to attract more share of increased demand than we previously baked in. While Accenture already has enviable share of its customers' total IT services spending, which had capped our outer growth rates previously, our increased confidence in revenue levels comes from newer areas the firm is targeting altogether like capital markets.

Accenture is one of the largest IT-services companies in the world, providing both consulting and outsourcing capabilities. We think that Accenture’s growth will remain at a healthy and gradual pace, thanks to the persistence of digital transformation trends. With the company's prominent reputation, which we believe to be crucial to the consulting business, and its proven ability to bring expertise to a gamut of enterprise issues, we are confident Accenture will maintain its wide economic moat.

Wide-moat Accenture reported relatively solid fourth-quarter results, but the outlook for fiscal 2024 was mild as the firm is baking in a continuation of the current macroeconomic environment, leaving discretionary consulting spending more muted than expected. As a result, we are lowering our fair value estimate to $247 per share from $258 per share. While shares are down roughly 6% upon the news, we still find the market for Accenture stock to be rich. While we don’t deride the opportunity ahead for this IT services powerhouse, especially in implementing the new wave of technologies, such as generative AI, we think it will be hard for the firm to expand GAAP operating margins past 110 basis points over the next five years as delayed consulting work pushes out net new managed services work, affecting scale and thus operating leverage.

Accenture is one of the largest IT-services companies in the world, providing both consulting and outsourcing capabilities. We think that Accenture’s growth will remain at a healthy and gradual pace, thanks to the persistence of digital transformation trends. With the company's prominent reputation, which we believe to be crucial to the consulting business, and its proven ability to bring expertise to a gamut of enterprise issues, we are confident Accenture will maintain its wide economic moat.

Wide-moat Accenture reported fiscal 2023 third-quarter results that narrowly missed our expectations on revenue and operating margin. While the business continues to operate in a turbulent macroenvironment, we see its business optimization actions and investment in cloud and artificial intelligence as signals of strength. As we near the end of the fiscal year, management moderated its full-year guidance, revising down estimates for revenue growth and EPS. We are, however, confident in the firm's ability to drive long-term future margin expansion, and therefore we maintain our $258 fair value estimate. Even with shares down around 3% after the earnings release, we continue to view the shares as overvalued.

Accenture is one of the largest IT-services companies in the world, providing both consulting and outsourcing capabilities. We think that Accenture’s growth will remain at a healthy and gradual pace, thanks to the persistence of digital transformation trends. With the company's prominent reputation, which we believe to be crucial to the consulting business, and its proven ability to bring expertise to a gamut of enterprise issues, we are confident Accenture will maintain its wide economic moat.

Accenture posted nice fiscal 2023 second-quarter results, beating our expectations on the top and bottom lines. While the consulting business has been more vulnerable in this macroeconomic environment due to its more discretionary nature, consulting bookings were stronger than management expected, coming close to last year’s record. This helped the shares rise about 7% after the earnings release on March 23. While management moderated its guidance for fiscal 2023, we see strong bookings as insurance of overall health beyond this year. As a result, we are maintaining our $258 fair value estimate. We think the shares of this wide-moat name, which we believe boasts an exemplary capital allocation strategy, are currently fairly valued.

Accenture reported a nice beat in the first quarter, surpassing our expectations for EPS by a decent margin, while rising just above our revenue forecasts. The beat came even considering foreign exchange headwinds hit Accenture results harder than expected, to the tune of 9.5% on the top line as opposed to 8.5%. Contrasting the beat, management’s second-quarter revenue guide was disappointing, which was the result of moderating consulting revenues and continued delayed decision making. Nonetheless, we’re pleased that strength persists on the margin front, leading to stronger earnings per share expected for the year. We remain confident in Accenture’s wide-moat rating from switching costs and intangible assets based on close customer relationships and established trust, and we believe these leave Accenture better positioned during periods of economic uncertainty, compared to less-moaty peers. Accenture’s shares are down 2%, approaching our $258 fair value estimate, which we are maintaining upon the mixed results.

Accenture is one of the largest IT-services companies in the world, providing both consulting and outsourcing capabilities. We think that Accenture’s growth will remain at a healthy and gradual pace, rather than experience a massive uptick. Still, with the company's prominent reputation, which we believe to be crucial to the consulting business, and its proven ability to bring expertise to a gamut of enterprise issues, we are confident Accenture will maintain its wide economic moat.

Wide-moat Accenture reported a good fourth quarter, largely in line with our revenue and profitability estimates as we adjusted for foreign exchange headwinds in our model. Although the company continues to experience headwinds outside of its control, we believe the firm can weather them well. We are maintaining our fair value estimate of $258 per share. The stock is down after the earnings release, leaving Accenture in 3-star territory. While we believe the market is accurately valuing the stock, FactSet consensus remains divergent from us at $337 per share due to greater top-line expectations. We believe our forecast for a revenue compound annual growth rate of 6% over the next five years fairly reflects Accenture's growth potential, and the company's resources will enable it to stay at the cutting edge of the hyper-transformative IT services and consulting space.

Accenture is one of the largest IT-services companies in the world, providing both consulting and outsourcing capabilities. We think that Accenture’s growth will remain at a healthy and gradual pace, rather than experience a massive uptick. Still, with the company's prominent reputation, which we believe to be crucial to the consulting business, and its proven ability to bring expertise to a gamut of enterprise issues, we are confident Accenture will maintain its wide economic moat.

Wide-moat Accenture reported a mixed third quarter, beating our revenue expectation while missing our earnings per share estimate as a result of exiting business in Russia. The company lowered the high end of its EPS forecast range for the year to reflect foreign-exchange headwinds. Given that the adjustment is due to drivers outside Accenture's control, we are unfazed by it, as we expect the impact to be temporary. We are maintaining our fair value estimate at $258 per share. The stock is down slightly after the earnings release, leaving Accenture trading in 3-star territory. While we think the market is accurately pricing the stock, FactSet consensus remains divergent from us at $371 per share due to greater top-line expectations. We believe our forecast for a revenue compound annual growth rate of 9% over the next five years fairly reflects Accenture's growth potential, inorganically as well as via strong digital transformation tailwinds. We do not bake in additional growth past our 9% CAGR, as we think that Accenture's pricing lever can only go so far in a weaker macroeconomic environment.

Wide-moat Accenture reported strong second-quarter results, surpassing both management’s and our top-line expectations due to broad-based growth as all 13 industry groups grew double-digits from the prior year coupled with new bookings near $20 billion. Accenture’s growth was across industry, geography, and deal-sizes, indicative of the hyper-growth environment spurred by the accelerated digital transformation throughout all geographies. The current macroeconomic environment has enabled Accenture to improve its pricing power, which showed up in its top line. With that said, increased demand is correlated with increased hiring. Its workforce grew by 24,000 people for the quarter, which weighed on margins as wage inflation has increased. Although Accenture achieved top-line growth and increased its fiscal-year guidance, we view the macroeconomic factors, such as wage inflation, as a notable weight on margins. As such, we are maintaining our fair value estimate of $258 per share. After earnings results were announced, the stock is down around 1% to $321, making Accenture still overvalued, in our view.

Accenture is one of the largest IT-services companies in the world, providing both consulting and outsourcing capabilities. We think that Accenture’s growth will remain at a healthy and gradual pace, rather than experience a massive uptick. Still, with the company's prominent reputation, which we believe to be crucial to the consulting business, and its proven ability to bring expertise to a gamut of enterprise issues, we are confident Accenture will maintain its wide economic moat.

Wide-moat Accenture reported excellent first-quarter results, with the top and bottom line exceeding both management’s and our expectations. Accenture experienced broad-based growth in the quarter, benefiting from accelerating digital transformations throughout all end markets. Outperformance was industry, geography, and deal-size agnostic--reflective of the tremendous demand environment Accenture is experiencing. As a result, Accenture raised its already-strong guidance for fiscal 2022, indicating material revenue, operating margin, and EPS expansion. We believe Accenture is uniquely positioned to address compressed transformation, a demand phenomenon that reflects enterprises requiring all-comprehensive digital and cloud transformations in a faster time span. We believe this broad-market trend toward clients taking on more change at once will accelerate and continue to build an impressive pipeline. On the back of increasing alignment of Accenture’s end markets with its business transformation-backed value proposition, we are increasing our fair value estimate to $258 per share from $236. After the results announcement, the stock is up about 10% to over $410, making Accenture still overvalued, in our view.

Accenture is one of the largest IT-services companies in the world, providing both consulting and outsourcing capabilities. We think that Accenture’s growth will remain at a healthy and gradual pace, rather than experience a massive uptick. Still, with the company's prominent reputation, which we believe to be crucial to the consulting business, and its proven ability to bring expertise to a gamut of enterprise issues, we are confident Accenture will maintain its wide economic moat.

Accenture is one of the largest IT-services companies in the world, providing both consulting and outsourcing capabilities. We think that Accenture’s growth will remain at a healthy and gradual pace, rather than experience a massive uptick. Still, with the company's prominent reputation, which we believe to be crucial to the consulting business, and its proven ability to bring expertise to a gamut of enterprise issues, we are confident Accenture will maintain its wide economic moat.

Wide-moat Accenture reported another strong quarter, with fourth-quarter results beating management’s and our top-line expectations thanks to broad-based outperformance on the back of accelerating digital transformations in all end markets. Accordingly, Accenture issued a positive fiscal 2022 outlook, reflective of robust top-line growth and year-over-year operating margin expansion. We view the margin expansion outlook as impressive, given the past year provides a tough comparison from cost reductions from lack of travel expenses. We expect Accenture to continue to benefit from digital and cloud transformations in its current growing market, while also viewing the budding Industry X business--an intelligent digital transformation agent--as a long-term value driver in this space. Alongside a strategic focus on cloud, particularly Accenture Cloud First’s platform, the company continues to show its strength in a variety of specific digital solutions, such as in its security business, which is growing at 29% as the digital-threat landscape secularly expands with the increasing technological dependence of enterprises. On the back of continued alignment of Accenture’s end markets with its business transformation-backed value proposition, alongside our annual model roll, we are increasing our fair value estimate to $236 per share from $220. Upon earnings results, the stock is up about 2% to $340, making Accenture still overvalued, in our view.