ACN Key Financial Metrics & Ratios

Summary

Business

Earnings Call

Valuation

Profitability

Financial Health

10Y annualized return is very good at 11.9% per year

ACN has met or exceeded earnings expectations in most recent quarters (9/10)

Strong Return on Equity

Reasonable Price-to-Earnings Ratio

Strong Profit Margins

Consistent Free Cash Flow

Low Debt Levels

Strong Liquidity Ratios

Strong Revenue Growth

Market Position and Client Relationships

Investment in Workforce and Technology

Positive Growth Outlook

Strong Focus on GenAI and Digital Transformation

High Price-to-Sales Ratio

Elevated EV/EBITDA Ratio

Moderate Dividend Payout Ratio

Cash Ratio Below 0.5

Competitive Pricing Pressure

Uncertain Macro Conditions

Accenture demonstrated strong performance in Q1 FY25 with significant revenue growth and robust new bookings, supported by strategic investments in workforce and technology. However, pricing pressures and uncertain macroeconomic conditions pose challenges for maintaining margins and growth momentum going forward. The company's focus on GenAI and digital transformation positions it well for future opportunities, but caution is warranted regarding overall client spending.

Analysis Date: December 19, 2024
Last Updated: March 11, 2025

+207%

+11.9% per year

Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.

Country IE

Exchange NYSE

Industry Information Technology Services

Sector Technology

Market Cap $220.79B

CEO Ms. Julie T. Spellman Sweet J.D.

Accenture plc is a company that helps other businesses improve and grow by providing expert advice and services. They work with companies to develop strategies, improve technology, and streamline operations. This includes everything from creating software and managing data to enhancing customer experiences and ensuring security. Essentially, Accenture helps businesses become more efficient and successful in a digital world.

Streams of revenue

Consulting Revenue: 51%

Outsourcing Revenue: 49%

Geographic Distribution

North America: 58%

Europe: 42%

Core Products

🌐

Digital Services Digital transformation

🔒

Security Services Cybersecurity

💼

Consulting Services Business strategy

⚙️

Operations Services Business processes

💻

Technology Services IT solutions

Business Type

Business to Business

Competitive Advantages

🌍

Global Reach and Scale Accenture's vast global presence allows it to serve multinational clients effectively, leveraging local insights and resources.

📊

Deep Industry Expertise Accenture's extensive knowledge across multiple industries enables it to deliver tailored solutions, enhancing client trust and loyalty.

🏆

Strong Brand Reputation Accenture has established a trusted global brand known for quality and innovation in professional services.

🚀

Technological Innovation A strong focus on technology and innovation, including AI and automation, positions Accenture as a leader in digital transformation services.

🔧

Diverse Service Offerings The company provides a wide range of services across various domains, allowing it to cater to diverse client needs and reduce dependency on any single market.

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Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.

Graham Value Metrics

Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.

Intrinsic Value

Estimated fair value based on Graham's formula

$344.51

Current Market Price: $285.22

IV/P Ratio: 1.21x (>1.0 indicates undervalued)

Margin of Safety

Gap between intrinsic value and market price

17.0%

Graham recommended a minimum of 20-30% margin of safety

Higher values indicate a greater potential discount to fair value

Graham Criteria Checklist

Benjamin Graham's value investing checklist for ACN

Positive earnings (5+ years)

Dividend history (5+ years)

P/E ratio ≤ 20 (23.26)

P/B ratio ≤ 1.5 (6.11)

Current ratio ≥ 2.0 (1.48x)

Long-term debt < Net current assets (0.62x)

Margin of safety (17.0%)

ACN does not meet all Graham criteria

Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.

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About Profitability Metrics

Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.

Return on Equity (ROE)

Measures how efficiently a company uses its equity to generate profits

26.85%

10% 15%

Higher values indicate better returns for shareholders

TTM (as of 2025-04-30)

Gross Profit Margin

Percentage of revenue retained after accounting for cost of goods sold

32.47%

20% 40%

Higher values indicate better efficiency in production

TTM (as of 2025-04-30)

Net Profit Margin

Percentage of revenue retained after accounting for all expenses

11.41%

8% 15%

Higher values indicate better overall profitability

TTM (as of 2025-04-30)

Strong Profit Margins

32.47%

Gross Profit Margin

15.17%

Operating Profit Margin

11.41%

Net Profit Margin

The company has a gross profit margin of 32.47%, operating profit margin of 15.17%, and net profit margin of 11.41%, showcasing effective cost control and strong profitability.

Consistent Free Cash Flow

$14.47

Free Cash Flow per Share

A free cash flow per share of approximately $14.47 indicates that the company generates substantial cash, providing flexibility for growth and dividends.

Moderate Dividend Payout Ratio

44.31%

Dividend Payout Ratio

The dividend payout ratio of 44.31% suggests that while the company returns some profits to shareholders, a significant portion is retained for reinvestment, which could be a concern for income-focused investors.

About Financial Health Metrics

Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.

Debt to Equity Ratio

Total debt divided by total equity

0.19x

1.0x 2.0x

Lower values indicate less financial leverage and risk

Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk

Q2 2025

Current Ratio

Current assets divided by current liabilities

1.48x

1.0x 2.0x

Higher values indicate better short-term liquidity

Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good

Q2 2025

Low Debt Levels

0.20

Debt-to-Equity Ratio

A debt-to-equity ratio of 0.20 indicates that the company maintains a conservative capital structure, minimizing financial risk.

Strong Liquidity Ratios

1.47

Current Ratio

1.47

Quick Ratio

With a current ratio and quick ratio both at approximately 1.47, the company demonstrates strong liquidity, indicating it can easily meet short-term liabilities.

Cash Ratio Below 0.5

0.48

Cash Ratio

The cash ratio of 0.48 suggests that while liquidity is strong, the company has less cash available to cover current liabilities compared to its total liabilities, indicating a potential liquidity risk.

Meeting Expectations

9 /10

Higher values indicate better execution and credibility

Strong Revenue Growth

$17.7 billion

Q1 FY25 Revenue

Revenue Growth (Local Currency)

Accenture reported $17.7 billion in revenue for Q1 FY25, growing 8% in local currency and exceeding expectations. This growth was broad-based across geographic markets and industry groups, indicating strong market demand.

Market Position and Client Relationships

$18.7 billion

New Bookings

Clients with Bookings > $100M

Accenture has established itself as a reinvention partner of choice for large-scale transformations, evidenced by $18.7 billion in new bookings and 30 clients with bookings over $100 million. This reflects a strong competitive advantage in securing large contracts.

Investment in Workforce and Technology

$242 million

Investment in Acquisitions

14 million

Training Hours

Accenture invested $242 million in acquisitions and training, focusing on enhancing the skills of its workforce and expanding capabilities in GenAI and data analytics, which are crucial for future service offerings.

Competitive Pricing Pressure

The company noted competitive market conditions leading to lower pricing across its business. This trend may impact margins if not managed effectively.

Positive Growth Outlook

4% to 7%

FY25 Revenue Growth Guidance

Accenture raised its revenue guidance for FY25 to a range of 4% to 7% growth in local currency, indicating confidence in continued demand for its services, particularly in large-scale transformations.

Strong Focus on GenAI and Digital Transformation

$500 million

GenAI Revenue

The company is leveraging its expertise in GenAI and digital core transformations to drive growth, which is expected to be a significant area of investment and opportunity in the coming years.

Uncertain Macro Conditions

Despite strong bookings and revenue growth, there is caution regarding overall spending by clients, particularly on smaller deals. The macroeconomic environment remains a concern that could impact future growth.