Accenture(US:ACN) ZACKS·2025-12-12 18:11Core Insights - Accenture plc (ACN) is scheduled to report its first-quarter fiscal 2026 results on December 18, with earnings expected at $3.74 per share, indicating a 4.2% growth year-over-year, and revenues projected at $18.6 billion, reflecting a 4.9% increase from the previous year [1][9]. Earnings Estimates - The Zacks Consensus Estimate for earnings has seen two upward revisions in the last 60 days, indicating increased analyst confidence, with no downward revisions during this period [2]. - Accenture has surpassed the Zacks Consensus Estimate in three of the last four quarters, with an average surprise of 3.2% [3]. Earnings Prediction Model - The current Earnings ESP for Accenture is -1.53%, and it holds a Zacks Rank of 3 (Hold), suggesting a lower likelihood of an earnings beat this quarter [4][5]. Revenue Growth Drivers - Revenue from the Americas is expected to grow by 4.2% to $9.1 billion, driven by sectors such as Banking and Capital Markets, industrials, and Software and Platforms [6]. - EMEA region revenues are projected to reach $6.7 billion, a 4.6% increase, supported by growth in insurance, utilities, consumer goods, life sciences, and retail and travel services [7]. - Asia Pacific revenues are anticipated to rise by 3.7% to $2.6 billion, with growth attributed to Banking and Capital Markets, Public Services, and Utilities [8]. Stock Performance - Over the past year, Accenture's shares have declined by 23%, underperforming its industry, which saw a 16.7% dip, and the Zacks S&P 500 composite, which rose by 17.6% [10]. - In the last six months, the stock has decreased by 12.2%, compared to a 5.2% decline in the industry and an 18.7% increase in the Zacks S&P 500 composite [13]. Valuation Metrics - Accenture's trailing 12-month price-to-earnings ratio stands at 19.23X, lower than the industry average of 25.31X, but higher than peers Cognizant Technology Solutions and Genpact, which have P/E ratios of 15.02X and 12.16X, respectively [14]. Business Considerations - The managed services segment is expected to grow by 2.3% year-over-year in Q1 fiscal 2026, driven by demand for modernization, application maintenance, cloud enablement, and cybersecurity-as-a-service [18]. - Accenture maintains a strong liquidity position with cash and equivalents of $11.5 billion and current debt of $114 million, resulting in a current ratio of 1.42 [19]. - The company has pursued an aggressive acquisition strategy, completing 23 acquisitions for $1.5 billion in fiscal 2025, including the recent acquisition of RANGR Data to enhance engineering capabilities [20]. Challenges - The aggressive acquisition strategy poses integration risks that may hinder long-term organic growth [21]. - Rising talent costs due to a competitive market and reduced reliance on Accenture's services due to advancements in AI present additional challenges [21][23].