Accenture plc, (ACN – Free report) has an impressive Growth Score by A. This style score condenses all the essential metrics from the company’s financial statements to get a real sense of the quality and sustainability of its growth.
The company has an expected long-term earnings per. Stock (three to five years) growth rate of 10%. In addition, earnings are expected to record 10.2% growth in fiscal policy 2021 and 9.5% in fiscal policy 2022.
The company’s shares have risen by 21.2% in the past year compared to the 20.8% rally of the company industry it belongs to.
Accenture’s cash and cash equivalent balance of $ 8.67 billion. At the end of the first quarter of 2021, the long-term debt level was well above $ 60 million. This indicates that the company has enough cash to meet its debt burden. A strong cash position enables the company to pursue strategic acquisitions, invest in growth initiatives as well as return cash through regular quarterly dividend payments and share repurchases.
Acquisitions have been one of the most important growth strategies for Accenture, which has enabled it to enter new markets, diversify and expand its product portfolio and maintain its leading position. Recently, the company announced the acquisition of cloud-native product and platform technology company Imaginea. Through this buyout, Accenture Cloud First will be able to leverage Imagina’s cloud native and product engineering skills to enhance its global capabilities, enabling customers across any industry to transform into cloud-first companies. Another acquisition, Businet System, will help the company improve its e-commerce capabilities.
Accenture is steadily gaining traction in its outsourced business backed by strong demand to help clients operate and maintain digital related services as well as cloud activation. In the financial year 2021 in the first quarter, Accenture’s outsourcing revenue increased by 9% year over year.
Higher talent costs due to a competitive talent market and strict immigration policies are hurting consulting service providers like Accenture. The industry is labor intensive and heavily dependent on foreign talent.
Zacks Rank and Key Picks
Accenture currently has a Zacks Rank # 3 (Team).
Some better ranked stocks in the broader Zacks Business service sector is Interpublic Group of Companies, Inc. (IPG – Free report), Gartner, Inc. (THAT – Free report) and NV5 Global (NVEE – Free report) , each having a Zacks Rank # 2 (Buy). You can see the complete list of today’s Zacks # 1 Rank (Strong Buy) shares here.
The long-term expected earnings per. Share (three to five years) growth rate for The Interpublic Group of Companies, Gartner and NV5 Global is linked to 2.4%, 13.5% and 18% respectively.
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