Accenture plc (ACN) Stock Analysis
Accenture plc (ACN) Stock Analysis
Analysis from 10-Q filed 2025-12-18. Data as of Q1 2026.
Overall Grade: F (Concerning)
Accenture plc faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 20.7% | Above industry average |
| FCF Margin | 17.3% | Strong cash generation |
| Debt/Equity | 0.2x | Conservative leverage |
Investment Thesis: Strong return on invested capital of 20.7% suggests durable competitive advantages and efficient capital allocation.
Explore Accenture plc: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: Accenture plc earns 20.7% ROIC, Top 25% in Technology
Accenture plc's trailing-twelve-month ROIC of 20.7% ranks Top 25% in Technology companies (sector median: 5.2%), driven by NOPAT margin of 10.8% combined with asset turnover of 1.1x. Source: 10-Q filed 2025-12-18. Gross margin of 32.0% with operating margin at 14.4% reflects a competitive pricing environment.
| Metric | ACN | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 20.7% | Excellent | Above sector median of 5.2% |
| Return on Equity (ROE) | 24.9% | Excellent | Efficient use of shareholder equity |
| Gross Margin | 32.0% | Good | Competitive pricing environment |
| Operating Margin | 14.4% | Good | Moderate operational efficiency |
Cash Flow: Accenture plc generates $12.5B FCF at 17.3% margin, positive NaN/8 quarters
Accenture plc generated $12.5B in free cash flow (TTM), a 17.3% FCF margin, a margin that ranks Top 50% in Technology. Operating cash flow exceeds net income by 1.7x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-12-18.
| Metric | ACN | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 17.3% | Good | Excellent cash conversion |
| Free Cash Flow (TTM) | $12.5B | Good | Positive cash generation |
| OCF/Net Income | 1.7x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: Accenture plc at 0.2x leverage
Accenture plc's debt-to-equity ratio of 0.2x reflects conservative leverage. Net cash position of $4.3B provides financial flexibility. Source: 10-Q filed 2025-12-18.
| Metric | ACN | Rating | Context |
|---|---|---|---|
| Debt to Equity | 0.2x | Excellent | Conservative capital structure |
| Net Cash Position | $4.3B | Excellent | Net cash positive |
Valuation: Accenture plc trades at 16.9x earnings
Accenture plc trades at a P/E of 16.9x. Free cash flow yield of 9.6% offers attractive cash returns relative to price.
| Metric | ACN | Rating | Context |
|---|---|---|---|
| P/E Ratio | 16.9x | Adequate | Reasonable valuation |
| EV/Sales | 1.7x | Excellent | Attractive revenue multiple |
| FCF Yield | 9.6% | Excellent | Attractive cash return |
| Dividend Yield | 3.0% | Adequate | Growth focus over income |
Capital Allocation: Accenture plc returns 7.8% shareholder yield
Accenture plc's total shareholder yield is 7.8% (dividends 3.0% + buybacks 4.8%). Source: 10-Q filed 2025-12-18.
| Metric | ACN | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 7.8% | Excellent | Dividend + buyback yield combined |
| Buyback Yield | 4.8% | Good | Active share repurchases |
| Total Capital Returned (TTM) | $10.1B | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 20.7% | Top 25% | 4.0x above |
| Free Cash Flow Margin | 17.3% | Top 50% | 1.9x above |
| Gross Margin | 32.0% | Bottom 25% | 0.6x below |
| Operating Margin | 14.4% | Top 50% | 3.0x above |
| Return on Equity (ROE) | 24.9% | Top 25% | 5.1x above |
| P/E Ratio | 16.9x | N/A | - |
Financial Scorecard
| Metric | ACN | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 20.7% | Excellent | Top 25% of sector (median: 5.2%) |
| Free Cash Flow Margin | 17.3% | Good | Top 50% of sector (median: 9.1%) |
| Gross Margin | 32.0% | Good | Bottom 25% of sector (median: 51.8%) |
| Debt to Equity Ratio | 16.5% | Excellent | Conservative capital structure |
| P/E Ratio (Price-to-Earnings) | 16.9x | Adequate | Fair value |
| Free Cash Flow Yield | 9.6% | Excellent | High cash return |
Frequently Asked Questions
Q: What is Accenture plc's Return on Invested Capital (ROIC)?
Accenture plc (ACN) has a trailing twelve-month Return on Invested Capital (ROIC) of 20.7%. This compares above the sector median of 5.2%. An ROIC above 20% indicates exceptional capital efficiency and strong competitive advantages.
Q: What is Accenture plc's Free Cash Flow Margin?
Accenture plc (ACN) has a free cash flow margin of 17.3%, generating $12.5 billion in free cash flow over the trailing twelve months. A FCF margin between 10-20% represents healthy cash generation for most industries.
Q: Is Accenture plc stock overvalued or undervalued?
Accenture plc (ACN) trades at a P/E ratio of 16.9x, which is above the sector median of N/A. The EV/Sales multiple is 1.7x. Free cash flow yield is 9.6%, which represents an attractive cash return to investors.
Q: Does Accenture plc pay a dividend?
Accenture plc (ACN) currently pays a dividend yield of 3.0%. Including share buybacks, the total shareholder yield is 7.8%. This yield is moderate, suggesting a balance between income and growth reinvestment.
Q: What is Accenture plc's revenue and earnings growth?
Accenture plc (ACN) grew revenue by 7.3% year-over-year. Earnings per share increased by 0.8% compared to the prior year. Modest growth indicates a mature business with stable demand.
Q: Is Accenture plc buying back stock?
Accenture plc (ACN) repurchased $6.3 billion of stock over the trailing twelve months. This represents a buyback yield of 4.8%.
Q: How does Accenture plc compare to competitors in Technology?
Compared to other companies in Technology, Accenture plc (ACN) shows: ROIC of 20.7% is above the sector median of 5.2% (Top 18%). FCF margin of 17.3% exceeds the sector median of 9.1% (Top 31% of sector). Gross margin at 32.0% is 19.8 percentage points lower than sector peers. These rankings are based on MetricDuck's analysis of all Technology companies with available SEC filings.
Q: What warning signs should I watch for with Accenture plc?
Investors in Accenture plc (ACN) should monitor these potential warning signs: 1) ROIC has been declining, potentially signaling deteriorating competitive position. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-Q filed 2025-12-18. TTM metrics as of Q1 2026.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.