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Accenture plc ACN has an impressive Growth Score of A. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of quality and sustainability of its growth.
The company has an expected long-term earnings per share (three to five years) growth rate of 10%. Further, earnings are anticipated to register 2.85% growth in 2020 and 6.54% in 2021.
Factors That Bode Well
Acquisitions have been one of the key growth strategies for Accenture. They have enabled the company to enter new markets, diversify and broaden its product portfolio as well as maintain its leading position.
The recent acquisition of Callisto Integration is expected to enable Accenture’s clients in Noth America to increase yields and improve product quality.
Another acquisition, Revolutionary Security boosts Accenture Security’s potential to provide advanced cyber defence management. Also, the buyout of Yesler enables the company to enhance its account-based marketing, sales enablement, customer advocacy and marketing automation offerings.
Thanks to COVID-19 induced global crisis, the company has developed an analytics-based platform to reduce the unemployment cycle created by the pandemic. Known as People + Work Connect, it is a business-to-business global and cross-industry platform that pools non-confidential and aggregated workforce information by categories like location and experience. Companies on the platform are able to share skills and experiences of their laid-off or furloughed workforce with those that are looking for employees. Its usage is free of cost.
A strong cash position enables the company to pursue strategic acquisitions, invest in growth initiatives and return cash through regular quarterly dividend payouts and share repurchases.
Accenture PLC Revenue (TTM)
Accenture PLC revenue-ttm | Accenture PLC Quote
Lack of talent amid the coronavirus crisis is hurting consulting services providers like Accenture. The industry is labor intensive and heavily dependent on foreign talent.
While acquisitions in large number improve revenue opportunities, business mix and profitability, they also add to integration risks. Moreover, frequent acquisitions are a distraction for management, which could impact organic growth, going forward.
Zacks Rank and Stocks to Consider
Accenture currently carries a Zacks Rank #3 (Hold).
Few more stocks to consider in the broader Zacks Business Services sector are CoreLogic, Inc. CLGX, DocuSign, Inc. DOCU and SailPoint Technologies Holdings, Inc. SAIL. CoreLogic and SailPoint carry a Zacks Rank #2 (Buy), whereas DocuSign carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term expected earnings per share (three to five years) growth rate for CoreLogic, DocuSign and SailPoint is at 12%, 46.8% and 15%, respectively.
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Accenture PLC (ACN) : Free Stock Analysis Report
CoreLogic, Inc. (CLGX) : Free Stock Analysis Report
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DocuSign Inc. (DOCU) : Free Stock Analysis Report
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