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Here's Why Investors Should Retain Accenture (ACN) Stock Now
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Accenture plc (ACN - Free Report) has an impressive Growth Score of A. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of quality and sustainability of growth. The company has an expected long-term (three to five years) earnings per share growth rate of 10%. For fiscal 2022 and 2023, earnings are expected to grow at a rate of 15% and 9.4%, respectively, on a year-over-year basis.
The stock has rallied 50.2% in the past year compared with 56% growth of the industry it belongs to.
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What’s Driving the Stock?
Acquisitions have been one of Accenture’s key growth strategies. The plans have enabled the company to enter new markets, diversify and broaden the product portfolio as well as maintain its leading position. Recently, Accenture completed the acquisition of T.A. Cook. The buyout is expected tp strengthen Accenture’s Industry X group’s services for digitizing clients’ engineering functions, asset performance management, factory floors, project management office services and plant operations. The deal is expected to boost Accenture’s potential in enhancing asset performance, raising safety, and lessening environmental impact and expenses in the chemicals, life sciences, metals and mining as well as oil and gas industries. Another purchase includes the acquisition of Greenville, SC-based Advoco. The acquisition increases Accenture’s capacity to increase safety, sustainability, productivity and cost efficiency of operations and supply chains of clients in the consumer goods & services, life sciences, industrial and transit industries.
The company’s cash and cash equivalent balance of $8.17 billion at the end of fourth-quarter fiscal 2021 was above the long-term debt level $53.5 million. This underscores that the company has enough cash to meet its debt burden. A strong cash position allows the company to pursue strategic acquisitions, invest in growth initiatives and return cash through consistent quarterly dividend payouts and share repurchases.
Risks
Higher talent costs stemming from a competitive talent market are hurting consulting services providers like Accenture. The industry is labor intensive and heavily dependent on foreign talent. While advancement in automation and AI offer massive opportunity to the industry, these technologies help clients to comprehend and integrate new methods to improve performance, thereby creating uncertainty for consulting services firms.
Avis Budget has an expected earnings growth rate of around 398.1% for the current year. CAR has a trailing four-quarter earnings surprise of 76.9%, on average.
Avis Budget’s shares have surged 673.8% so far this year. It has a long-term earnings growth of 27.5%. CAR sports a Zacks #1 Rank.
Cross Country Healthcare has an expected earnings growth rate of around 397.8% for the current fiscal year. CCRN has a trailing four-quarter earnings surprise of 75%, on average.
Cross Country Healthcare’s shares have surged 236.9% so far this year. It has a long-term earnings growth of 21.5%. CCRN sport a Zacks #1 Rank.
CRA International has an expected earnings growth rate of around 61.2% for the current year. Ithas a trailing four-quarter earnings surprise of 51%, on average.
CRA International’s shares have surged 135.7% so far this year. It has a long-term earnings growth of 15.5%. FDS carries a Zacks #2 (Buy) Rank.
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Here's Why Investors Should Retain Accenture (ACN) Stock Now
Accenture plc (ACN - Free Report) has an impressive Growth Score of A. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of quality and sustainability of growth. The company has an expected long-term (three to five years) earnings per share growth rate of 10%. For fiscal 2022 and 2023, earnings are expected to grow at a rate of 15% and 9.4%, respectively, on a year-over-year basis.
The stock has rallied 50.2% in the past year compared with 56% growth of the industry it belongs to.
What’s Driving the Stock?
Acquisitions have been one of Accenture’s key growth strategies. The plans have enabled the company to enter new markets, diversify and broaden the product portfolio as well as maintain its leading position. Recently, Accenture completed the acquisition of T.A. Cook. The buyout is expected tp strengthen Accenture’s Industry X group’s services for digitizing clients’ engineering functions, asset performance management, factory floors, project management office services and plant operations. The deal is expected to boost Accenture’s potential in enhancing asset performance, raising safety, and lessening environmental impact and expenses in the chemicals, life sciences, metals and mining as well as oil and gas industries. Another purchase includes the acquisition of Greenville, SC-based Advoco. The acquisition increases Accenture’s capacity to increase safety, sustainability, productivity and cost efficiency of operations and supply chains of clients in the consumer goods & services, life sciences, industrial and transit industries.
The company’s cash and cash equivalent balance of $8.17 billion at the end of fourth-quarter fiscal 2021 was above the long-term debt level $53.5 million. This underscores that the company has enough cash to meet its debt burden. A strong cash position allows the company to pursue strategic acquisitions, invest in growth initiatives and return cash through consistent quarterly dividend payouts and share repurchases.
Risks
Higher talent costs stemming from a competitive talent market are hurting consulting services providers like Accenture. The industry is labor intensive and heavily dependent on foreign talent. While advancement in automation and AI offer massive opportunity to the industry, these technologies help clients to comprehend and integrate new methods to improve performance, thereby creating uncertainty for consulting services firms.
Stocks to Consider
Accenture carry a Zacks #3 (Hold) Rank. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the broader Zacks Business Services sector are Avis Budget (CAR - Free Report) , Cross Country Healthcare, Inc. (CCRN - Free Report) and CRA International, Inc. (CRAI - Free Report) .
Avis Budget has an expected earnings growth rate of around 398.1% for the current year. CAR has a trailing four-quarter earnings surprise of 76.9%, on average.
Avis Budget’s shares have surged 673.8% so far this year. It has a long-term earnings growth of 27.5%. CAR sports a Zacks #1 Rank.
Cross Country Healthcare has an expected earnings growth rate of around 397.8% for the current fiscal year. CCRN has a trailing four-quarter earnings surprise of 75%, on average.
Cross Country Healthcare’s shares have surged 236.9% so far this year. It has a long-term earnings growth of 21.5%. CCRN sport a Zacks #1 Rank.
CRA International has an expected earnings growth rate of around 61.2% for the current year. Ithas a trailing four-quarter earnings surprise of 51%, on average.
CRA International’s shares have surged 135.7% so far this year. It has a long-term earnings growth of 15.5%. FDS carries a Zacks #2 (Buy) Rank.