Accenture plc (ACN): what the price requires
The current priced-in claim for Accenture plc (ACN) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.
Generated: 2026-07-14 · Source: https://boothcheck.com/report/ACN
Headline
| Field | Value |
|---|---|
| Ticker | ACN |
| Company | Accenture plc |
| Current price | $138.06/sh |
| Composition | Communications, Media & Technology 16% / Financial Services 18% / Health & Public Service 21% / Products 30% / Resources 14% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 4.0% |
| Operating margin today | 14.5% |
| Margin compression implied | -10.5pp |
| Multiple paid | 8x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.
Solve inputs: computed at a 9.1% cost of capital with 4% terminal growth over a 5-year stage.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -2.04σ |
| cohort percentile (of 210 peers) | 10 |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.01x | 5 | expensive |
| Earnings | 0.91x | 5 | justifies |
| Relative | 0.57x | 3 | justifies |
| Growth | 0.95x | 4 | justifies |
Families that justify the price: Asset, Earnings, Relative, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.0%); the inversion above states its own rate.
Per-Model Detail (n=17)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $480.05 | 0.29x | yes | FCF base $13.3B, growth 7% (input: historical growth), terminal g 4.0%, WACC 9.0%, 5yr projection |
| DCF Exit Multiple | Growth | $212.79 | 0.65x | yes | Exit EV/EBITDA: 5.0x / 7.0x / 9.0x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $242.69 | 0.57x | yes | P/E 20x (static sector reference · 2026-04), scenarios: 16.8x / 20.0x / 23.2x (bear / base = reference held flat / bull), EV/EBITDA 11.18x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | $95.41 | 1.45x | yes | Stage 1: -1% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $136.80 | 1.01x | yes | BV/sh $51.80, ROE (TTM) 24.4%, ke 9.3% |
| Two-Stage Excess Return | Asset | $222.95 | 0.62x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $111.14 | 1.24x | yes | Rev $73.1B, growth 7% (input: historical growth; tapered), Terminal P/S: 1.0x / 1.2x / 1.4x (bear / base = today's held flat / bull, cap 8x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $151.80 | 0.91x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $10.24B × (1−24%) / WACC 9.0% → EPV (no growth) |
| Residual Income | Asset | $201.29 | 0.69x | yes | BV $51.80 + 5yr PV of (ROE (TTM) 24.4% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $120.80 | 1.14x | yes | √(22.5 × EPS $12.52 × BVPS $51.80) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $266.65 | 0.52x | yes | EBITDA $11.24B × sector EV/EBITDA 14.0x |
| FCF Yield | Earnings | $232.01 | 0.60x | yes | FCF $12581.7M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $195.41 | 0.71x | yes | SBC-adj FCF $10.50B (FCF $12.58B − SBC $2.08B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $68.08 | 2.03x | yes | EPS $12.52 × (8.5 + 2×-1.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $55.49 | 2.49x | yes | BV $51.80 × (ROIC 9.6% / WACC 9.0%) |
| P/Sales Sector | Relative | $178.12 | 0.78x | yes | Revenue $73.10B × sector P/S 1.5x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $135.35 | 1.02x | yes | EPS $12.52 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net cash | $5.1b |
| Net debt / NOPAT (after-tax) | -0.64x (net cash) |
| Net debt / operating income (pre-tax) | -0.49x (net cash) |
| Interest coverage | 39.6x |
| Share count CAGR (buyback) | -1.0% |
| Burning cash | no |
Bullet Takeaways
- Accenture is the scale leader in technology consulting and managed services, spread across five industry groups, and the live question is whether generative AI is a tailwind that fills its pipeline or a headwind that compresses the billable-hours model it runs on.
- The defining near-term risk is demand: new bookings have softened, down a couple of percent year over year, even as the largest reinvention deals keep growing, so the bookings line is the single number that decides the direction.
- Watch advanced-AI bookings and large-deal counts against full-year revenue growth guidance of 3% to 5% in local currency, with the fortress balance sheet, more than $5 billion of net cash and roughly 40 times interest coverage, funding both acquisitions and buybacks while the model adjusts.
Bull Case
Start with the fear, because it is the whole debate: artificial intelligence will gut consulting by automating the work people pay Accenture to do. The bull answer is that the data so far points the other way. Accenture is selling AI transformation faster than it is losing legacy work, with advanced-AI bookings growing at triple-digit-adjacent rates and a roster of partnerships spanning the leading model and data platforms. The company that helps thousands of enterprises actually deploy AI captures the spend that AI creates, and that is a larger pool than the efficiency it removes. The reframe is that Accenture does not sell hours; it sells the capability to reinvent how a company runs, and AI raises the stakes of getting that reinvention right.
The substance under that is a genuinely formidable franchise. Accenture earns a trailing return on equity above 24%, converts profit into roughly $12.6 billion of free cash flow, and reinvests to stay ahead: the filing describes investing $1.5 billion across 23 strategic acquisitions in a single fiscal year to add "skills and capabilities in new areas" and deepen industry expertise. That programmatic dealmaking, recently including a roughly $4.2 billion push into cybersecurity, is how Accenture keeps refreshing what it sells before competitors can. The large-deal engine is intact: management has pointed to a rising count of $100-million-plus client bookings, which is exactly where a scale player with global delivery wins against boutiques.
The third leg is a balance sheet that turns durability into shareholder returns. Accenture holds more than $5 billion of net cash, covers interest roughly forty times over, pays a growing dividend, and steadily retires stock. A business that throws off this much cash with this little capital intensity can fund acquisitions, the dividend, and buybacks simultaneously, which is why the share count keeps drifting lower. The bull case is that the AI fear is mispricing a company AI actually helps: the leader in enterprise technology change, with the cash to buy whatever capability it lacks, priced as if the next wave of technology were a threat rather than its core business.
Bear Case
The structural worry sits inside the business model itself. Accenture's economics rest on a vast, skilled workforce billed out to clients, and the filing is candid that it must constantly "adjust levels of new hiring and use involuntary terminations as a means to keep our supply of skills and resources in balance with changes in client demand." That balancing act is manageable in a normal cycle. It becomes a structural problem if generative AI permanently shrinks the headcount a given engagement requires, because then the company is selling fewer hours per dollar of client value, and the labor-leveraged model that has compounded for decades inverts. A consulting firm whose product is largely human time faces a different kind of risk than a software firm when the technology automating that time is the very thing it sells.
The near-term evidence is a demand wobble. New bookings have turned down a couple of percent year over year, and management has acknowledged that clients have paused work and that revenue in the coming months may run lighter as AI reshapes the industry and macro and geopolitical uncertainty weighs on spending. Consulting is discretionary: when budgets tighten, the reinvention project is easy to defer. The filing also flags relentless competition, that rivals "may be more successful at selling similar services they offer, including to companies that are our clients," and that there is "competition for scarce talent with market-leading skills" in the new AI areas, so Accenture must out-hire and out-acquire to stay ahead even as the demand for the old work softens.
The valuation is the one place the bear is not on firm ground, and honesty requires saying so. On the company's reported economics, the static methods do not call Accenture expensive; the price is supported across asset, earnings-power, peer-multiple, and growth lenses, and the inversion reads it as undemanding rather than stretched. So the bear here is not an overvaluation argument. It is that the market may be right to discount the franchise despite its quality, because the thing being threatened, the labor-arbitrage consulting model, is precisely the thing AI is most likely to compress, and the bookings softness is the first data point in what could be a multi-year reset rather than a passing pause.
Valuation
What stands out about Accenture is that the price asks for very little. Inverted on operating income, it pays only about 7 times company-wide operating profit, a multiple so low it sits below what even a steady 5%-a-year decline in operating income would warrant, and it lands in the lower half of the peer-multiple range. The price is not betting on growth; it is braced for stagnation or mild decline. For a business growing revenue in the mid-single digits with a 24%-plus return on equity, that is a conservative thing for a market to assume.
Unusually for a high-quality compounder, the families of methods broadly agree rather than split. The asset-value methods, built off a book value near $51.80 a share and a high return on equity, support the price. The earnings-power method, capitalizing normalized operating income, lands close to it, and the cash-flow and peer-multiple lenses point higher still given roughly $12.6 billion of free cash flow capitalized against the price. So this is not the familiar pattern of only the growth method reaching a rich price; here the static, value-oriented methods themselves support or exceed the price. That is what makes Accenture read as a value-and-quality name rather than a pure growth bet, and it is the strongest fact in the company's favor against the AI-disruption narrative.
Solvency removes any question about resilience. Accenture holds more than $5 billion of net cash, covers interest about forty times over, and is not burning cash; the share count has drifted down about 1% a year on consistent buybacks layered on top of a growing dividend. There is no balance-sheet fragility to bound against, so the downside is governed entirely by the demand and model question rather than by financial risk. The decisive issue for the price is not whether Accenture can weather a downturn, it plainly can, but whether the bookings softness is a pause or the beginning of AI permanently lowering the hours-per-dollar the business sells.
Catalysts
The pivotal catalyst is the bookings line, and the most recent read was mixed. Third-quarter fiscal 2026 new bookings were $19.32 billion, down 2% in U.S. dollars and 3% in local currency year over year, the soft print that has defined the recent narrative, even as management emphasized that large-scale reinvention demand remains strong, with a rising count of $100-million-plus client bookings year to date. The company guided full-year revenue growth of 3% to 5% in local currency and GAAP diluted EPS of $13.19 to $13.57, a 9% to 12% increase.
The AI catalysts cut both ways and are the heart of the story. Advanced-AI bookings have been surging, reaching $2.2 billion in the first fiscal quarter, up sharply year over year, and management has said bookings from emerging AI and data partners are on track to more than double versus the prior year. At the same time, the company has warned that AI is upending the consulting industry and that some clients paused work amid geopolitical uncertainty, the tension that makes each quarter's bookings the number to watch.
The capital-deployment catalyst is the acquisition program. Accenture agreed to take a majority stake in cybersecurity firm Dragos and to acquire runZero and NetRise for a combined enterprise value of about $4.2 billion, extending its push into security at a moment when AI adoption is raising enterprise risk. Analyst sentiment leans constructive overall, with a Buy-tilted consensus, though the views span from Strong Buy to Sell, reflecting exactly the disagreement over whether AI is Accenture's tailwind or its threat.
Peer Cohorts (Per Segment, With Filing Citations)
Core business (reported)
- CTSH (COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION)
- (no filing in the citation store)
- DXC (DXC Technology Co)
- (no filing in the citation store)
- EPAM (EPAM SYSTEMS, INC.)
- (no filing in the citation store)
- WIT (WIPRO LIMITED)
- (no filing in the citation store)
- IBM (INTERNATIONAL BUSINESS MACHINES CORP)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Accenture Q3 FY2026 results, June 18, 2026 · company FY2026 guidance, 2026 · company commentary, FY2026 · company announcement, 2026 · analyst consensus, 2026