Back to top

Image: Bigstock

Accenture (ACN) Banks on Service Strength, Technological Prowess

Read MoreHide Full Article

Accenture plc (ACN - Free Report) is currently benefiting from technological prowess, contributions from acquisitions and partnerships, and dividend payouts.

The company reported mixed first-quarter fiscal 2024 results, wherein earnings beat the Zacks Consensus Estimate while revenues missed the mark.

Adjusted earnings of $3.27 per share surpassed the Zacks Consensus Estimate by 4.1% and improved 6% from the year-ago fiscal quarter’s reading. Revenues of $16.2 billion missed the consensus estimate by a slight margin but increased 3% year over year.

How is Accenture Faring

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.

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. The recent acquisition of Impendi bolsters Accenture’s private equity capabilities, offering tailored sourcing and procurement services. The addition of Impendi's procurement analytics expertise enhances Accenture's ability to guide private equity clients with insights into spending and savings opportunities.

Another acquisition, Navisite, enhances Accenture’s digital transformation and managed services capabilities, focusing on modernizing IT for the AI era. The buyout bolsters Accenture’s ability to aid North American clients in rapidly transforming their enterprises.

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.

Accenture has strong relationships with SAP (SAP - Free Report) and Adobe (ADBE - Free Report) . The company’s collaboration with SAP is aimed at enabling clients’ transition to the cloud and delivering continuous innovation with the help of the duo’s joint offerings.

Through its longstanding partnership with Adobe, Accenture uses Adobe Experience Cloud applications to address the business challenges of clients.

Unique Zacks Analysis of Your Chosen Ticker

Pick one free report - opportunity may be withdrawn at any time

Accenture PLC (ACN) - $25 value - yours FREE >>

SAP SE (SAP) - $25 value - yours FREE >>

Adobe Inc. (ADBE) - $25 value - yours FREE >>

Published in