Accenture Plc (ACN) is a global powerhouse in the IT consulting and digital transformation space. Accenture has been making headlines recently with its strong financial results, strategic acquisitions, and innovative solutions. For example, Accenture recently completed its acquisition of Flutura, an industrial artificial intelligence (AI) company based in India, to strengthen its industrial AI services for clients in the energy, chemicals, metals, mining, and pharmaceutical industries.
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Accenture Plc's Overview
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What is Accenture
Accenture Plc (ACN) is a global leader in IT consulting and digital transformation, providing a wide range of services and solutions to clients across various industries and regions. Accenture got founded in 1989 as a spin-off from Arthur Andersen, a former accounting firm. The headquarter is in Dublin, Ireland, and has over 730,000 employees in more than 200 cities and 49 countries. Accenture's CEO is Julie Sweet, who joined the company in 2010 and became the first female chief executive in 2019. Accenture's top shareholders include The Vanguard Group, Geode Capital Management, and Fidelity Management & Research Corporation.
Accenture has achieved several milestones and innovations since its inception in 1989. Some of these include going public on the NYSE in 2001, launching its Skills to Succeed initiative in 2010, acquiring Cloud Sherpas in 2015, launching its Applied Intelligence platform in 2017, and launching the company's new brand campaign and purpose, “Let there be change” in 2020.
Accenture Plc's Business Model and Products/Services
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Accenture makes money by providing various services and solutions to clients across various industries and regions. Accenture operates through five segments: Communications, Media & Technology; Financial Services; Health & Public Services; Products; and Resources. Each segment serves a different set of clients with specific needs and challenges.
What does Accenture do
Accenture offers a range of commercial software products and platforms designed to solve the most pressing business needs of its clients. These products and platforms are based on Accenture's industry and functional experience, as well as its cloud and digital capabilities. Some of the products and platforms that Accenture offers are:
- Accenture Life Insurance & Annuity Platform (ALIP): This cloud-based platform allows carriers and providers to compete in the digital market by providing data-driven, ecosystem-ready, and future-flexible solutions for life insurance and annuity products.
- Accenture Comms & Media Solutions: These are a set of solutions that help communications and media companies to deliver better video services, monetize data and media, transform advertising operations, and optimize experience across platforms.
- Accenture Cloud for Consumer Goods: This cloud-based solution combines Accenture's deep industry experience with Salesforce's platform to transform trade promotion management and retail execution for consumer goods companies.
- Accenture NewsPage for Consumer Goods: This is a cloud-based solution that supports consumer goods companies in developing markets with distribution management, sales force automation, and merchandising capabilities.
- Accenture Public Service: This is a portfolio of solutions that help public service organizations to migrate to the cloud, use data-driven decision-making and operational efficiencies, and increase the digital adoption of citizen services.
- Accenture INTIENT for Life Sciences: This is a cloud-based platform that enables the flow of data and utilizes advanced analytics to deliver insights that can improve patient and research outcomes for life sciences companies.
- Accenture ai.Retail: This cloud-based solution uses applied intelligence to center retail processes around customers, from supply chain to marketing and merchandising.
Accenture Plc's Financials, Growth, and Valuation Metrics
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Accenture Market Cap
As of September 2023, Accenture has a market capitalization of approximately $206.90 billion.
Accenture Earnings
Accenture Plc's financial performance reflects its strong demand and resilience. In the third quarter of fiscal year 2023, which ended on May 31, 2023, the company reported revenue of $16.60 billion, net income of $2.05 billion, and earnings per share (EPS) of $3.15. These figures represent year-over-year growth rates of 3%, 12%, and 13%, respectively.
The company also maintained a healthy balance sheet, with total assets of $50.13 billion, total liabilities of $17.09 billion, and total equity of $26.06 billion as of May 31, 2023. Moreover, the company generated strong cash flows from its operations, which amounted to $3.29 billion in the third quarter of fiscal 2023. After deducting capital expenditures of $142 million, the company had a free cash flow of $3.15 billion.
Growth Prospects
Accenture Plc's growth prospects are based on its diversified portfolio of services and solutions, its global presence and scale, its innovation capabilities and investments, and its client relationships and trust. The company expects to continue to grow its revenues and earnings in the future, driven by the increasing demand for digital transformation, cloud migration, cybersecurity, sustainability, and social impact solutions across various industries and markets. The company also expects to benefit from its strategic acquisitions, partnerships, and alliances that enhance its offerings and expand its reach. For the fourth quarter of fiscal year 2023, the company expects revenue increase of about 8% to 9%. For the full fiscal year 2023, the company expects EPS to be in the range of $10.94 to $11.05, representing a year-over-year growth rate of 10% to 12%.
Valuation Metrics
Accenture Plc has been trading at a premium valuation compared to its peers and industry averages over the past five years, reflecting its superior financial performance, growth prospects, competitive advantages, and market leadership position. The company's valuation metrics have also increased significantly over the past year due to the strong demand for its services and solutions amid the digital transformation trend accelerated by the COVID-19 pandemic.
As of July 26, 2023, Accenture Plc had a market capitalization of $210.978 billion, ranking first among its peers in the information technology services industry. The company's trailing 12-month price-to-earnings (P/E) ratio was 28.31 as of July 26, 2023, higher than the industry average of 27.25 and the sector average of 21.08. The company's forward P/E ratio (based on estimated EPS for the next 12 months) was 25.45, higher than the industry average of 23.67 and the sector average of 24.53.
According to Yahoo Finance, Accenture Plc's trailing 12-month price-to-sales (P/S) ratio was 3.19 as of July 26, 2023, higher than the industry average of 2.27 and the sector average of 2.40. The company's trailing 12-month price-to-book (P/B) ratio was 7.91, higher than the industry average of 4.70 and the sector average of 5.14. The company's trailing 12-month price-to-earnings-growth (PEG) ratio (based on estimated EPS growth for the next five years) was 2.96, higher than the industry average of 2.11 and the sector average of 2.26.
According to Stock Analysis, Accenture Plc's enterprise value (EV) was $194.89 billion as of July 26, 2023, ranking second among its peers in the information technology services industry. The company's trailing 12-month EV/revenue ratio was 3.07, and the company's trailing 12-month EV/EBITDA ratio was 16.92.
ACN Stock Performance Analysis
Source: TradingView
Accenture is a global leader in professional services, providing a range of solutions in strategy, consulting, digital, technology, and operations.
What is ACN
The company went public on July 19, 2001, on the New York Stock Exchange (NYSE) under the ticker symbol ACN. The company is based in Ireland and trades in US dollars. The regular trading hours for ACN stock are from 9:30 a.m. to 4:00 p.m. Eastern Time, Monday to Friday. The pre-market trading hours are from 4:00 a.m. to 9:30 a.m., and the after-market trading hours are from 4:00 p.m. to 8:00 p.m.
Accenture stock has 1 split in its history, a 3 for 2 split on September 04, 1990. The company has a share repurchase program that reduces the number of outstanding shares over time. As of July 25, 2023, the company had about 620 million shares outstanding. Accenture also pays quarterly dividends to its shareholders. The current annual dividend rate is $1.12 per share, which translates to a dividend yield of 1.4%.
ACN Stock Price Performance since its IPO
Accenture stock price has increased significantly since its IPO, reaching an all-time high of $406.55 on December 29, 2021. The lowest closing ACN share price was $12.64 on September 4, 2001. The current stock price as of July 26, 2023, is $317.59.
Accenture's stock price volatility is relatively low compared to the market and its peers. The beta coefficient, which measures the sensitivity of the stock price to market movements, is 1.23 for the past five years, meaning that the stock is slightly more volatile than the market. The key drivers of Accenture stock price are its financial performance, growth prospects, competitive position, Accenture news, and market sentiment.
The company has consistently delivered strong revenue and earnings growth, driven by its diversified portfolio of services, global presence, and strategic acquisitions. The company also has a solid balance sheet, high cash flow generation, and attractive returns on equity and invested capital. Accenture faces competition from other IT consulting firms, such as IBM, Deloitte, and Cognizant, as well as from emerging technologies and changing customer demands.
ACN Stock Price Forecast
Accenture share price trend is bullish in the long term, as the company continues to benefit from the increasing demand for digital transformation and cloud-based solutions across various industries and geographies. The company also has a strong track record of innovation and adaptation to changing market conditions and customer needs.
The key resistance and support levels of ACN stock are shown in the chart below. Resistance levels are where the stock price faces selling pressure and may reverse its direction. Support levels are where the stock price faces buying pressure and may bounce back. As of June 16, 2023, the major resistance level is around $328, close to the all-time high. The major support level is around $300, which is near the 50-day moving average.
Source: TradingView
Analyst recommendations and price targets for ACN stock are mostly positive, reflecting the optimistic outlook for the company's future performance and growth potential. According to Yahoo Finance, out of 27 analysts covering the stock, 17 have a buy rating, nine have a hold rating, and one has a sell rating. The average price target is $329.20, which implies an upside of 4% from the current price. The highest price target is $377 from Credit Suisse, which implies an upside of 19%. The lowest price target is $279 from Morgan Stanley, which implies a downside of 12%.
Challenges and Opportunities
In this section, we will discuss some of the challenges and opportunities that Accenture faces in the market, as well as its future outlook and expansion plans.
Competitive Risks
Accenture operates in a highly competitive and dynamic industry, where it faces competition from other IT consulting firms, such as IBM, Deloitte, Cognizant, Capgemini, and Infosys. These competitors may offer similar or better services, lower prices, or more innovative solutions than Accenture. For example, IBM has a strong presence in the cloud computing and artificial intelligence markets, which are key growth areas for Accenture. Deloitte has a diversified portfolio of services, including audit, tax, consulting, and advisory. Cognizant has a cost advantage due to its offshore delivery model and focus on digital services. Accenture needs to constantly invest in research and development, talent acquisition and retention, and customer satisfaction to maintain its competitive edge.
Other Risks
Apart from competitive risks, Accenture also faces other risks that may affect its business performance and reputation. These include cybersecurity threats, data privacy breaches, regulatory changes, legal disputes, geopolitical uncertainties, natural disasters, pandemics, and other unforeseen events. Accenture has implemented various risk management policies and procedures to mitigate these risks, but there is no guarantee that they will be sufficient or effective in all situations.
Growth Opportunities
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Accenture also has many growth opportunities in the market as it leverages its core competencies and capabilities to create value for its clients and stakeholders. Some of the growth opportunities are:
- Growing demand for digital transformation services: Accenture helps its clients transform their businesses by adopting digital technologies and solutions, such as cloud computing, artificial intelligence, analytics, blockchain, the Internet of things, and augmented reality. These technologies enable clients to improve their efficiency, productivity, innovation, customer experience, and competitive advantage. According to a report by IDC, global spending on digital transformation is expected to reach $2.3 trillion by 2023, growing at a compound annual growth rate of 17.1%. Accenture is well-positioned to capture this market opportunity with its strong expertise and experience in digital transformation.
- Ability to attract top talent and acquire capabilities: Accenture has a reputation for being a great place to work, as it offers its employees a diverse and inclusive culture, a collaborative and learning environment, a global network of opportunities, and a competitive compensation and benefits package. Accenture also invests heavily in training and developing its employees to enhance their skills and knowledge. According to Fortune, Accenture ranked as the 15th best company to work for in 2023, based on employee feedback. Accenture also acquires other companies or forms strategic partnerships to expand its capabilities and offerings in various domains and markets. For example, in 2023 alone, Accenture acquired Imaginea, a cloud-native product engineering firm; Pollux, an industrial robotics solutions provider; REPL Group, a retail consulting firm; Cygni, a cloud-native full-stack development firm; and CreativeDrive, a content production company.
Future Outlook and Expansion
Based on its current performance and growth prospects, Accenture has a positive future outlook and expansion plan. The company expects revenue growth of 10% to 11% for the fiscal year 2023, driven by strong demand across all its business segments and geographies. The company also expects to increase its operating margin to 15.1%, reflecting its operational efficiency and scale. The company plans to continue investing in innovation, talent development, acquisitions, partnerships, sustainability initiatives, and social responsibility programs to enhance its value proposition and differentiation in the market.
Why Traders Should Consider ACN Stock?
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Accenture is not only a solid long-term investment, but also an attractive trading opportunity for traders who want to capitalize on its price movements and volatility.
Reasons Why Traders Should Consider ACN Stock
There are several reasons why traders should consider ACN stock, such as:
- Strong uptrend: ACN stock has been on a strong uptrend since its IPO, as the company has consistently delivered strong financial performance and growth prospects. The stock has reached new all-time highs several times, indicating a bullish momentum and sentiment. The stock also tends to bounce back quickly from temporary pullbacks, creating buying opportunities for traders.
- Low volatility: ACN stock has relatively low volatility compared to the market and its peers, as the company has a stable and diversified business model that can withstand external shocks and uncertainties. The stock has a beta coefficient of 1.23 for the past five years, meaning that it is slightly more volatile than the market, but not too much. This makes the stock suitable for traders who prefer moderate risk and reward scenarios.
- High liquidity: ACN stock has a high liquidity, as it has a large market capitalization of $210.978 billion and an average daily trading volume of 2.3 million shares. This means that traders can easily buy and sell the stock without facing significant price slippage or execution delays. The high liquidity also enables traders to use various trading tools and strategies, such as leverage, short selling, and options.
- Clear technical signals: ACN stock has clear technical signals that can help traders identify entry and exit points, as well as support and resistance levels. The stock follows well-defined trends, patterns, and indicators that can be analyzed using various technical analysis tools and methods, such as moving averages, trend lines, Fibonacci retracements, Bollinger bands, MACD, RSI, and stochastic.
Trading Strategies for ACN Stock
There are various trading strategies that traders can use to trade ACN stock, depending on their risk appetite, time horizon, and trading objectives. Some of them are:
- Trend following: This strategy involves following the direction of the dominant trend of the stock and entering long or short positions accordingly. Traders can use moving averages or trend lines to identify the trend direction and strength, as well as potential trend reversals or corrections. For example, traders can use the 50-day and 200-day moving averages to determine the long-term trend of the stock. If the 50-day moving average is above the 200-day moving average, it indicates an uptrend. If the 50-day moving average is below the 200-day moving average, it indicates a downtrend. Traders can enter long positions when the stock price crosses above the 50-day moving average or short positions when the stock price crosses below the 50-day moving average.
Source: TradingView
- Swing trading: This strategy involves capturing short-term price movements of the stock within a larger trend or range. Traders can use support and resistance levels, Fibonacci retracements, Bollinger bands, or candlestick patterns to identify swing highs and lows, as well as potential reversal or continuation signals. For example, traders can use Fibonacci retracements to measure the extent of a price correction within a trend and enter long positions near the 38.2%, 50%, or 61.8% retracement levels or short positions near the 23.6%, 76.4%, or 100% retracement levels.
- Breakout trading: This strategy involves entering long or short positions when the stock price breaks out of a consolidation pattern or range with high volume and momentum. Traders can use chart patterns, such as triangles, rectangles, flags, pennants, or wedges to identify breakout points and targets. For example, traders can use a symmetrical triangle pattern to trade ACN stock. A symmetrical triangle is formed when the stock price makes lower highs and higher lows within two converging trend lines. The breakout point is where the two trend lines meet or where the stock price closes above or below one of them with high volume. The breakout target is calculated by measuring the height of the triangle at its widest point and adding or subtracting it from the breakout point.
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Conclusion
In this article, we have demystified Accenture (NYSE: ACN) stock and explained the strategy behind the IT consulting giant. We hope this article has helped you gain a better understanding of Accenture and its stock. If you are interested in trading ACN stock CFD with VSTAR, you can register an account today and enjoy the benefits of a globally regulated trading platform with low fees, high leverage, short selling and more.
