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Accenture: Growth With A Sound Business Model

Feb. 06, 2019 8:43 AM ETAccenture plc (ACN)6 Comments
Kurt Pollet profile picture
Kurt Pollet


  • Accenture has a solid history of earnings growth with more growth forecast for 2020.
  • The company's management is actively seeking out new markets to boost its future growth.
  • Accenture has a sound business model and focuses on both organic growth and acquisitions.


Accenture plc (NYSE:ACN) provides technological consulting services to large organizations around the globe. The company has a solid history of growth which is expected to continue through to 2020.

Accenture is well managed with a sound business model that focuses on both organic growth and acquiring their competition (whenever economically viable). Accenture's business model may also provide some earnings shielding during periods of economic weakness.

The stock is somewhat expensive but most good growth stocks are expensive; as investors are happy to pay for future earnings growth. In my opinion, Accenture would make a sound investment with future capital gains potential.


Accenture has reported financial results for the first quarter ending November 2018 (data from Seeking Alpha and Yahoo). Note: Accenture's financial year starts in September.

The company's revenue was up 5.5 percent and its earnings were up 9.5 percent from the same quarter last year. Over the last five years, Accenture's revenue has grown 6.9 percent per year and its earnings have increased by 9.3 percent per year.

The return on equity is high at 38 percent and the profit margin (profit to revenue ratio) is decent at 10 percent.

The asset ratio (total liabilities to total assets) is 51 percent which means that Accenture's total debt is only 51 percent of the value of everything the company owns (note that the asset value is the book value and not the liquidated value of its assets).

The company's book value is currently around $20 and with a stock price of $156, Accenture is trading at 7.9x book value.

The analysts' consensus forecast is for revenue to increase by 3.1 percent in 2019 and increase by 6.8 percent in 2020. Earnings are forecast to increase by 11.9 percent in 2019 and increase by 9.1 percent in 2020. The 2019 PE ratio

This article was written by

Kurt Pollet profile picture
Kurt Pollet has been involved in the stock market since 1986 and this long-term experience provides a broad perspective of the stock market and its performance. He operates the website stockinvesting.today and produces a newsletter that provides market analysis, strategies and stock picks.

Analyst’s Disclosure: I am/we are long ACN. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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