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Here's Why You Should Hold on to Accenture (ACN) Stock Now
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Accenture plc (ACN - Free Report) has had an impressive run over the past year. The stock has gained 33.2%, outperforming the 32.9% and 24.8% growth of the industry and S&P 500 composite, respectively.
Accenture has an impressive Growth Score of B. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of the quality and sustainability of its growth.
The company has an expected long-term earnings per share (three to five years) growth rate of 9%. Earnings are expected to increase 4.7% year over year in fiscal 2024 and 7.7% in fiscal 2025.
Technological Prowess, Acquisitions and Dividends are Tailwinds
Accenture’s growth strategy focuses on delivering 360° value to its stakeholders, mainly through the use of technology. The company focuses on long-term growth through building a digital core with the help of cloud, data and AI, technology evolution and investment in talent. We believe this strategy positions Accenture as a trusted partner for its clients.
The company continues to witness strong demand for application modernization and maintenance, cloud enablement and cybersecurity-as-a-service. These trends are boosting Accenture’s managed services business across the world. Managed services revenues increased 11% year over year in fiscal 2023. We expect these revenues to grow 5.4% and 5.5%, respectively, in fiscal 2024 and 2025.
Accenture has a disciplined acquisition strategy focused on channelizing its business in high-growth areas, adding skills and capabilities, and deepening industry and functional expertise. The company spent $2.5 billion across 25 acquisitions in fiscal 2023. Accenture recently agreed to acquire the media and marketing technology company, Jixie, to strengthen Accenture Song’s marketing transformation capabilities for Indonesian clients. The recent acquisition of Customer Management IT and SirfinPA strengthens the company’s digital transformation capabilities for Italy’s public sector.
Commitment to shareholder returns makes Accenture a reliable way for investors to compound wealth over the long term. In fiscal 2023, 2022, and 2021, the company paid $2.8 billion, $2.5 billion and $2.2 billion in dividends, respectively. We are expecting steady growth in income, which will translate to steady cash flow, enabling it to pay out stable dividends. Per our estimates, the company’s net income will grow 4.9% and 8.6%, respectively, in fiscal 2024 and 2025.
Some Risks
Higher talent costs due to a competitive talent market are hurting consulting services providers like Accenture. The industry is labor-intensive and heavily dependent on foreign talent. Moreover, while advancements in automation and AI offer massive opportunities to the industry, these technologies enable clients to comprehend and integrate new methods to improve performance, thereby creating uncertainty for consulting services firms.
Zacks Rank and Stocks to Consider
ICFI currently carries a Zacks Rank #3 (Hold).
Investors can consider the following better-ranked stocks:
ROL has an impressive earnings surprise history, beating the consensus mark in three of the four trailing quarters and matching once, the average surprise being 7.2%.
FTI Consulting (FCN - Free Report) also carries a Zacks Rank #2. The consensus mark for fourth-quarter 2023 earnings is pegged at $1.57 per share, indicating 3.3% year-over-year growth.
FCN has an impressive earnings surprise history, beating the consensus mark in three of the four trailing quarters and missing once, the average surprise being 8.5%.
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Here's Why You Should Hold on to Accenture (ACN) Stock Now
Accenture plc (ACN - Free Report) has had an impressive run over the past year. The stock has gained 33.2%, outperforming the 32.9% and 24.8% growth of the industry and S&P 500 composite, respectively.
Accenture has an impressive Growth Score of B. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of the quality and sustainability of its growth.
The company has an expected long-term earnings per share (three to five years) growth rate of 9%. Earnings are expected to increase 4.7% year over year in fiscal 2024 and 7.7% in fiscal 2025.
Accenture PLC Price
Accenture PLC price | Accenture PLC Quote
Technological Prowess, Acquisitions and Dividends are Tailwinds
Accenture’s growth strategy focuses on delivering 360° value to its stakeholders, mainly through the use of technology. The company focuses on long-term growth through building a digital core with the help of cloud, data and AI, technology evolution and investment in talent. We believe this strategy positions Accenture as a trusted partner for its clients.
The company continues to witness strong demand for application modernization and maintenance, cloud enablement and cybersecurity-as-a-service. These trends are boosting Accenture’s managed services business across the world. Managed services revenues increased 11% year over year in fiscal 2023. We expect these revenues to grow 5.4% and 5.5%, respectively, in fiscal 2024 and 2025.
Accenture has a disciplined acquisition strategy focused on channelizing its business in high-growth areas, adding skills and capabilities, and deepening industry and functional expertise. The company spent $2.5 billion across 25 acquisitions in fiscal 2023. Accenture recently agreed to acquire the media and marketing technology company, Jixie, to strengthen Accenture Song’s marketing transformation capabilities for Indonesian clients. The recent acquisition of Customer Management IT and SirfinPA strengthens the company’s digital transformation capabilities for Italy’s public sector.
Commitment to shareholder returns makes Accenture a reliable way for investors to compound wealth over the long term. In fiscal 2023, 2022, and 2021, the company paid $2.8 billion, $2.5 billion and $2.2 billion in dividends, respectively. We are expecting steady growth in income, which will translate to steady cash flow, enabling it to pay out stable dividends. Per our estimates, the company’s net income will grow 4.9% and 8.6%, respectively, in fiscal 2024 and 2025.
Some Risks
Higher talent costs due to a competitive talent market are hurting consulting services providers like Accenture. The industry is labor-intensive and heavily dependent on foreign talent. Moreover, while advancements in automation and AI offer massive opportunities to the industry, these technologies enable clients to comprehend and integrate new methods to improve performance, thereby creating uncertainty for consulting services firms.
Zacks Rank and Stocks to Consider
ICFI currently carries a Zacks Rank #3 (Hold).
Investors can consider the following better-ranked stocks:
Rollins (ROL - Free Report) currently carries a Zacks Rank #2 (Buy). For the fourth quarter of 2023, the Zacks Consensus Estimate for earnings is pegged at 20 cents, indicating year-over-year growth of 17.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ROL has an impressive earnings surprise history, beating the consensus mark in three of the four trailing quarters and matching once, the average surprise being 7.2%.
FTI Consulting (FCN - Free Report) also carries a Zacks Rank #2. The consensus mark for fourth-quarter 2023 earnings is pegged at $1.57 per share, indicating 3.3% year-over-year growth.
FCN has an impressive earnings surprise history, beating the consensus mark in three of the four trailing quarters and missing once, the average surprise being 8.5%.