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ACN · Analyze
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Summary Dashboard
| Metric | Value | Context |
|---|---|---|
| Current Price | ~$167.52 | Near 52-week low ($155.82 low / $317.31 high) |
| Market Cap | ~$103B | Down from $200B+ peak |
| Forward P/E | 11.3x | Historical fair: 20-25x |
| Trailing P/E | 13.7x | Historically depressed |
| Dividend Yield | 3.89% | Historically 1.5-2.5% → now at peak |
| FCF Yield | 10.5% | Based on $10.87B FCF / $103B mkt cap |
| Analyst Consensus | 17 Buy / 11 Hold / 0 Sell | No analyst recommends selling |
| Q3 Earnings | June 18, 2026 | 1 week away — major catalyst |
Fundamentals Analyst
Revenue & Earnings (FY ends August 31)
| Metric | FY2022 | FY2023 | FY2024 | FY2025 | 3-yr CAGR |
|---|---|---|---|---|---|
| Revenue | $61.6B | $64.1B | $64.9B | $69.7B | +4.2% |
| Gross Profit | $19.7B | $20.7B | $21.2B | $22.2B | +4.1% |
| Gross Margin | 32.0% | 32.3% | 32.6% | 31.9% | Stable ~32% |
| Operating Income (reported) | $9.4B | $9.9B | $10.0B | $10.8B | +4.8% |
| Net Income | $6.88B | $6.87B | $7.26B | $7.68B | +3.7% |
| Diluted EPS | $10.71 | $10.77 | $11.44 | $12.15 | +4.3% |
| Free Cash Flow | $8.82B | $9.00B | $8.62B | $10.87B | +7.2% |
Note on FY2023: Included $1.06B special charges (restructuring). Adjusted EPS growth was closer to 7.8% that year — the headline suppression was one-time.
FY2024 softness was real: Revenue grew only 1.2% — large IT transformation projects were paused industry-wide as rates peaked and budgets tightened. FY2025 reacceleration to +7.4% and FCF jumping +26% confirms the pause was temporary.
Per-Share & Capital Allocation
| Metric | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|
| FCF per share | $13.73 | $14.09 | $13.55 | $17.19 |
| Revenue per share | $95.91 | $100.72 | $103.48 | $110.18 |
| Dividend per share | ~$3.88 | ~$4.49 | ~$5.17 | ~$5.92 |
| Dividend CAGR (3yr) | — | — | — | +15.2% |
| FCF payout ratio (dividends) | 27.9% | 31.4% | 37.6% | 34.0% |
| SBC | $1.68B | $1.91B | $1.94B | $2.09B |
| SBC as % FCF | 19.1% | 21.2% | 22.5% | 19.2% |
| SBC-adjusted FCF | $7.14B | $7.09B | $6.67B | $8.78B |
Capital Allocation (FY2025 — $10.87B FCF): | Use | Amount | % FCF | |---|---|---| | Dividends | $3.70B | 34% | | Buybacks | $4.62B | 42% | | M&A | $1.47B | 14% | | Capex | $0.60B | 6% | | Total Deployed | $10.39B | 96% |
ACN returns nearly all FCF. This is a compounding capital return machine — 76% returned to shareholders (dividends + buybacks), only 6% to capex (capital-light model confirmed).
Shares Outstanding
| Year | Diluted Shares | YoY Change |
|---|---|---|
| FY2022 | 642.8M | — |
| FY2023 | 638.6M | -0.7% |
| FY2024 | 635.9M | -0.4% |
| FY2025 | 632.4M | -0.6% |
Net buyback pace ~0.5-0.7%/year after SBC issuance. Conservative but steady — the share count was never going to collapse like a tech buyback machine, given SBC is $2.1B/yr.
Balance Sheet Health
| Metric | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|
| Cash & Equivalents | $7.89B | $9.05B | $5.00B | $11.48B |
| Total Debt | $3.33B | $3.15B | $4.12B | $8.18B |
| Net Cash / (Debt) | +$4.56B | +$5.90B | +$0.88B | +$3.30B |
| Debt-to-Assets | 7.0% | 6.1% | 7.4% | 12.5% |
| Goodwill | $13.1B | $15.6B | $21.1B | $22.5B |
| Total Assets | $47.3B | $51.2B | $55.9B | $65.4B |
⚠️ Key balance sheet change: ACN issued $5.03B in long-term debt in FY2025 (vs. near-zero prior years) — this funded an aggressive M&A push ($1.47B acquisitions) and boosted buybacks. They now carry $8.18B total debt vs. $11.48B cash = $3.3B net cash. Still healthy. But the shift from near-zero LTD to $5B is worth monitoring.
⚠️ Goodwill risk: Goodwill jumped from $13.1B (FY2022) to $22.5B (FY2025) through acquisitions. If acquired revenue disappoints, impairment charges would hit book value — not FCF, but sentiment-negative. Worth watching.
ROIC Analysis
| Metric | FY2024 | FY2025 |
|---|---|---|
| ROIC (incl. goodwill) | 26.2% | 22.7% |
| Tangible ROIC (ex-goodwill) | ~57% | ~60% |
ROIC declined slightly in FY2025 because invested capital grew faster (M&A) than NOPAT. Tangible ROIC at ~60% is exceptional and confirms the underlying business generates outstanding returns on true operating capital. The goodwill-included ROIC decline is a mathematical artifact of acquisition accounting, not operational deterioration.
Moat Analyst
ROIC + Gross Margin Trend
- Gross margin: 32% (stable 4 years) — structurally limited by labor model, but predictably sticky
- Operating margin (normalized): ~15.5-17% — expanding modestly as AI productivity tools are deployed internally
- Tangible ROIC 60%: One of the highest in the IT services sector; confirms genuine economic moat
Moat Sources (Strength Assessment)
| Source | Strength | Durability |
|---|---|---|
| C-suite embedded relationships (98 of Fortune 100 clients) | ★★★★★ | Medium — being tested |
| Scale (750K employees, 49 countries) | ★★★★ | Medium — AI compresses headcount need |
| AI proprietary data (2,000+ GenAI projects) | ★★★★ | High — data moat compounding |
| Multi-year contract backlog ($82B TTM bookings) | ★★★★★ | High — 12+ months visibility |
| Talent depth (specialized domains: healthcare, defense, FSI) | ★★★ | Declining — talent is mobile |
| Global coordination capability | ★★★★ | High — hard to replicate |
The moat is real but under structural pressure. The question isn't whether it exists — it clearly does — but whether ACN can expand the moat in the AI era or merely defend it.
Adversarial Stress Test: How Would a Rival Attack?
Most dangerous threat vector: AI-native competitors repricing delivery - A $50M IT transformation program that ACN prices using 200 consultants × 18 months = $36M labor + overhead → $50M bill - An AI-native firm can do 60-70% of that work with 40 consultants + AI tools in 12 months at $20M - This dynamic is already playing out in repetitive coding, documentation, testing, and integration work - ACN's response: pivot to outcome-based pricing and AI-assisted delivery. Still in transition.
Second threat: Hyperscaler disintermediation - AWS, Google Cloud, and Azure all have professional services arms - When a client moves to Google Cloud, Google's PS team leads the migration and often becomes the ongoing strategic partner - ACN's counter: they are all three hyperscalers' biggest partners simultaneously — they have relationships the hyperscalers need to reach global enterprise clients
Third threat: Indian IT at price parity (Infosys, TCS, Wipro) - For pure outsourcing/maintenance work (lower-value, commoditized), Indian IT is structurally cheaper - ACN has already ceded this market segment and focuses higher up the value chain - This is an ongoing secular loss of the bottom tier, not the core business
Fourth threat: Talent drain - ACN's top 5% — the managing directors and technology architects who own client relationships — are increasingly recruited targets for Google, Microsoft, and AI startups - If this talent layer thins, the client relationships weaken - Counter: ACN has begun offering equity participation at senior levels and rapid AI upskilling programs
Disruption Vectors (Severity Order)
- AI automates delivery labor (High severity, 3-5 year timeline) — already compressing margins at competitors; ACN is ahead because they're deploying AI internally first
- Hyperscaler PS expansion (Medium severity, 5-10 year timeline) — ongoing, but ACN is a net beneficiary as the largest hyperscaler partner
- AI-native boutiques (Medium severity, 2-5 years for specific use cases) — price undercutting is real for standardized work; ACN's differentiator is complexity
- Talent attrition (Low-Medium severity) — competitive market but ACN's brand still attracts talent
- DOGE/government spending (Low severity) — ~1% revenue drag, manageable; federal was ~8% of revenue anyway
Evergreen Rating: 6.5/10 (down from ~8/10 in 2022)
ACN is not dying. Record bookings, growing FCF, and an AI-first pivot are genuine. But the rating declines because: - The business model is structurally challenged in ways that weren't present 5 years ago - The transition to AI-era consulting is a 3-5 year journey, not complete - 71% of enterprise buyers reportedly planning to re-evaluate vendor relationships 2025-2028 is a genuine churn risk signal - ACN is betting that AI complexity = more demand for ACN; this bet is partially right (AI bookings $5B+/quarter proves it) but not certain for the full scale of their headcount base
Moat Defense Evaluation: B+
ACN is responding to disruption better than any IT services peer: - Leading AI bookings among IT services globally - SynOps (AI-assisted operations platform), LearnVantage (AI training), dedicated GenAI practices - CEO Julie Sweet has been vocal about being the AI transformation leader, not the AI disruption victim - Pivoting pricing from time-and-materials to outcomes - The problem: transition takes time, and markets price the risk now
Sentiment & Intelligence Analyst
Latest Earnings — Q2 FY2026 (February 28, 2026)
| Metric | Actual | Estimate | Beat? |
|---|---|---|---|
| Revenue | $18.7B | $18.53B | ✓ +$170M |
| Adj. EPS | $3.94 | $3.74 | ✓ +$0.20 |
| New Bookings | $22.1B | (record) | ✓ |
| AI Bookings | $5.0B+ | — | ✓ |
| Adj. Op. Margin | 17.0% | +30bps YoY | ✓ Expanding |
FY2026 Full-Year Guidance (reaffirmed Q2): - Revenue growth: 3-5% local currency; ex-federal: 4-6% - FCF guidance: Raised to $10.8-11.5B (up from prior range) - Dividend increased to $4.48/quarter annualized
Q3 FY2026 Guidance: - Revenue: $18.35B–$19.0B (+1-5% local currency) - EPS estimate: ~$3.72
Key Strategic Development: End of AI Metric Disclosure
CEO Julie Sweet announced Q2 FY2026 would be the last quarter ACN separately reports AI bookings/revenue. Rationale: "AI now permeates 80% of large deals." This signals maturity — AI is no longer a pilot program, it's the delivery model. Market reaction was initially negative (investors loved the bookings headline), but this is operationally positive: AI is integrated, not bolted-on.
Upcoming Catalyst: Q3 Earnings June 18, 2026 (7 days)
Watch for: 1. Revenue vs. $18.35B-$19.0B guidance — beat/miss will be volatile 2. FY2026 guidance update — key for whether soft patch is isolated or worsening 3. DOGE commentary — has federal headwind stabilized or expanding? 4. Margin commentary — AI-assisted delivery should be lifting op margins 5. Bookings trajectory — still confirming demand is real and converting
ACN has beaten EPS estimates 11 of the last 12 quarters. A beat is likely; the stock reaction will depend more on full-year guidance tone than the quarterly number.
Market Drivers (Stock Decline Analysis)
ACN stock fell from ~$387 (Dec 2021 peak) to ~$167 (June 2026) — a 57% decline over 4.5 years. The EPS decline over that period: 0%. This is entirely a P/E multiple compression event.
| Driver | Impact | Resolved? |
|---|---|---|
| DOGE/federal spending cuts | ~1% revenue headwind | Partially — stable at ~1% drag |
| AI disruption fears | Multiple compression 23x→11x | No — ongoing uncertainty |
| Large IT program pauses (macro) | FY2024 revenue slowdown | Largely yes — FY2025 reaccelerated |
| Rising interest rates (2022-2024) | Growth multiple de-rating | Yes — rates declining |
| Soft Q3 guidance (Feb 2026) | $18.35-19.0B range = below expectations | Pending June 18 |
The market has priced in a scenario where ACN's business model is structurally impaired. The fundamentals do not yet support that conclusion: FCF is growing, bookings are record, margins are stable to expanding. The risk is priced in; the question is whether it materializes.
Analyst Sentiment
| Period | Strong Buy | Buy | Hold | Sell |
|---|---|---|---|---|
| Current | 4 | 13 | 11 | 0 |
| -1 month | 4 | 14 | 10 | 0 |
| -2 months | 4 | 14 | 10 | 0 |
| -3 months | 4 | 14 | 10 | 0 |
Zero sells across 28 analysts for 4 consecutive months. Mean price target (Feb 2026) ~$292. Even if targets have been revised down 20% since, that implies $233 — still 40% upside from $167.
Corporate Actions / Insider Signal
- ACN itself: $4.62B in buybacks in FY2025 (self-signaling conviction in own stock)
- FCF guidance raised mid-year (most recent: $10.8-11.5B, raised from $10.5-11.0B)
- No concerning insider selling reported
Valuation Analyst
Fair Value Models
1. Graham's Intrinsic Value - EPS: $12.15, BVPS (book): $50.16/share - Graham: √(22.5 × $12.15 × $50.16) = $117 - ⚠️ Low applicability — Graham punishes asset-light service firms. Use as absolute floor only, not fair value.
2. DDM (Dividend Discount Model) - Current annual div: ~$6.44/share (at 3.89% yield × ~$165.6 price) - D₁ (forward): $6.44 × 1.10 = $7.08 (10% growth, below 3-yr 15.2% CAGR) - Cost of equity (r): 10%
| Assumption | Terminal Growth (g) | DDM Value |
|---|---|---|
| Conservative | 5% | $141 |
| Base | 6% | $177 |
| Bull | 7% | $236 |
DDM base case: ~$177. ACN's 15%/yr dividend growth is unlikely to sustain forever but 6-7% over a 5-10yr horizon is conservative and defensible.
3. Dividend Yield Theory (DYT) - Historical normal yield for ACN: ~1.5-2.5% (2018-2022 range) - Current yield: 3.89% — historically extreme (only exceeded in brief 2020 crash)
| Normal Yield Assumption | DYT Fair Value |
|---|---|
| 3.0% (new bear normal) | $215 |
| 2.5% (conservative historical) | $258 |
| 2.0% (pre-2022 normal) | $322 |
DYT base case: $215-$258. Even at the bearish assumption that the market permanently prices ACN at 3% yield (acknowledging structural headwinds), fair value is $215.
4. Bogle Expected Return - Dividend yield: 3.89% - EPS growth: 6% (split between 4.3% EPS CAGR and 7.2% FCF CAGR) - P/E change (11.3x fwd → 18x fwd over 5 years): +9.7%/yr - Total return with re-rate: 19.6%/yr — deeply undervalued if any P/E normalization occurs - Without any P/E re-rate: 9.89%/yr — stock is fairly valued at $167 for a 10% return threshold
Weighted Fair Value
| Model | Value | Weight | Weighted |
|---|---|---|---|
| Graham | $117 | 10% | $11.70 |
| DDM (base $177) | $177 | 35% | $61.95 |
| DYT (base $215-258, mid $237) | $237 | 35% | $82.95 |
| Bogle fair value ($214) | $214 | 20% | $42.80 |
| Weighted Fair Value | $199 |
Base case fair value: ~$195-$225 Current price $167 = approximately 13-25% below fair value range Strong buy floor: $155-175 (currently in range)
A portfolio-specific passage was removed from the public build.
Debate Round: Tensions
Tension 1: Moat says "6.5/10 and declining." Fundamentals says "FCF +26% in FY2025 and guidance raised."
Resolution: These are compatible. The moat is under pressure on a 5-10yr horizon; in the next 1-2 years, the business is fine. The stock discount should reflect terminal risk, not near-term impairment. At 11x forward earnings and 9.5x FCF, there is enough margin of safety for the 5-10yr structural risk.
Tension 2: Valuation says "deeply undervalued at $167." Sentiment says "Q3 earnings are a risk in 7 days."
Resolution: Q3 is binary. A beat + guidance raise sends ACN to $190-210. A miss or guidance cut sends it to $150-155. Position sizing into the earnings event matters more than the long-term thesis.
Tension 3: Moat says "AI automates delivery labor — multi-year pressure." Sentiment says "AI bookings $5B+ per quarter — ACN is winning."
Resolution: Both are true simultaneously. AI is destroying the old delivery model AND creating new high-value demand. The question is which force dominates revenue trajectory. So far: new demand is winning (reacceleration in FY2025, record bookings). Watch closely if bookings growth slows — that's when the bear case materializes.
Manager's Verdict
Conviction: 7.0/10
Accenture is a value-priced compounder trading at multi-decade lows on multiple metrics — both P/E and dividend yield. The bear case (AI disrupts the consulting model) is real and partially valid; the bull case (AI complexity = more ACN demand) is also real and currently winning in the data. The stock has been punished as if the bear case has already happened, when it has not.
This is not a value trap. The distinctions that define traps are: (1) declining revenue — not here (4-6% growth); (2) declining FCF — not here ($10.87B, guidance raised); (3) losing customers — not here (record bookings, 98/100 Fortune 100). What is happening is multiple compression on a perceived AI risk that remains a thesis, not a demonstrated outcome.
The 7 days to Q3 earnings are the primary near-term risk. Soft guidance could push to $150 (the 52-week low zone). A beat + full-year reaffirmation could begin a re-rating cycle.
Action Items
| Action | Rationale | Priority |
|---|---|---|
| Hold existing 2 shares | Don't sell into weakness on an operationally healthy company | Immediate |
| Stage-add 1 share now at ~$167 | In/below stated add zone of $175-190 on watchlist | Consider |
| Wait for Q3 June 18 clarity | High-conviction add of 1-2 more shares POST-earnings if guidance reaffirmed | June 18 |
| Hard stop: $145 | Below this suggests fundamental deterioration, not just sentiment | Set |
| Trim at $250+ | Near fair value range; redeploy capital | On strength |
Updated watchlist targets: - Revised add zone: $155-175 (lowered from $175-190 to reflect current price + near-term earnings risk) - Fair value: $195-225 (upgraded from prior estimate) - Trim: $250+ (unchanged)
Moat caveat: If Q3 bookings decelerate meaningfully (below $15B) or if FY2026 revenue guidance is cut to <3%, this warrants a full re-evaluation at a lower conviction level (5.5/10 max). Don't hold into a thesis break.
Key Risks
| Risk | Probability | Impact | Mitigant |
|---|---|---|---|
| AI automates away consulting labor | High (5-10yr) | High | ACN is leading the AI pivot; outcome pricing transition |
| Q3 earnings miss + guidance cut | Medium | High | Add only post-earnings or in small pre-earnings tranche |
| DOGE expands beyond federal (~8% rev) | Low | Medium | Federal is already discounted in guidance |
| Goodwill impairment (M&A acquisitions) | Low-Medium | Low (non-cash) | Monitor acquisition performance quarterly |
| Talent drain at senior levels | Medium | Medium | Equity programs + AI upskilling retention |
Sources: Yahoo Finance MCP, Accenture Q2 FY2026 8-K (SEC), AlphaSpread ACN Q2 Analysis, Phemex ACN 2026 Analysis, FourWeekMBA GenAI Bookings Analysis, Futurumgroup Accenture Federal Analysis, PitchGrade Accenture AI Margin Analysis