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Accenture (ACN) Gains But Lags Market: What You Should Know

·3 min read

Accenture (ACN) closed the most recent trading day at $306.26, moving +0.85% from the previous trading session. This move lagged the S&P 500's daily gain of 1.42%. Meanwhile, the Dow gained 0.97%, and the Nasdaq, a tech-heavy index, lost 0.07%.

Coming into today, shares of the consulting company had gained 9.38% in the past month. In that same time, the Business Services sector gained 9.42%, while the S&P 500 gained 6.69%.

Wall Street will be looking for positivity from Accenture as it approaches its next earnings report date. The company is expected to report EPS of $2.57, up 16.82% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $15.45 billion, up 15.11% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $10.68 per share and revenue of $61.62 billion. These totals would mark changes of +21.36% and +21.94%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Accenture. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Accenture currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Accenture is currently trading at a Forward P/E ratio of 28.44. Its industry sports an average Forward P/E of 22.18, so we one might conclude that Accenture is trading at a premium comparatively.

Investors should also note that ACN has a PEG ratio of 2.84 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Consulting Services stocks are, on average, holding a PEG ratio of 1.44 based on yesterday's closing prices.

The Consulting Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 69, putting it in the top 28% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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