Accenture PLC (ACN, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $361.20, Accenture PLC has witnessed a daily loss of 1.41%, marked against a three-month change of 9.41%. A thorough analysis, underlined by the GF Score, suggests that Accenture PLC is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 8/10
- Profitability rank: 9/10
- Growth rank: 10/10
- GF Value rank: 6/10
- Momentum rank: 8/10
Each one of these components is ranked and the ranks also have a positive correlation with the long-term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With high ranks in growth and profitability, GuruFocus assigned Accenture PLC the GF Score of 96 out of 100, which signals the highest outperformance potential.
Understanding Accenture PLC Business
Accenture PLC is a leading global IT services firm that provides consulting, strategy, and technology and operational services. These services run the gamut from aiding enterprises with digital transformation to procurement services to software system integration. The company provides its IT offerings to a variety of sectors, including communications, media and technology, financial services, health and public services, consumer products, and resources. Accenture employs just under 500,000 people throughout 200 cities in 51 countries. With a market cap of $225.92 billion and sales of $66.36 billion, Accenture PLC maintains an operating margin of 15.04%, reflecting its efficient business operations.
Financial Strength Breakdown
According to the Financial Strength rating, Accenture PLC's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for Accenture PLC stands impressively at 133.92, underscoring its strong capability to cover its interest obligations. This robust financial position resonates with the wisdom of legendary investor Benjamin Graham, who favored companies with an interest coverage ratio of at least 5.
With an Altman Z-Score of 7.02, Accenture PLC exhibits a strong defense against financial distress, highlighting its robust financial stability. With a favorable Debt-to-Revenue ratio of 0.12, Accenture PLC's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Accenture PLC's impressive standing among its peers in generating profit. Accenture PLC's Operating Margin has increased by 1.35% over the past five years, as shown by the following data: 2020: 14.70; 2021: 15.08; 2022: 15.21; 2023: 13.74; 2024: 14.79.
Furthermore, Accenture PLC's Gross Margin has seen a consistent rise over the past five years, as evidenced by the data: 2020: 31.53; 2021: 32.38; 2022: 31.99; 2023: 32.34; 2024: 32.61. This trend underscores the company's growing proficiency in transforming revenue into profit. Accenture PLC's strong Predictability Rank of 5.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Accenture PLC demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 9.3%, which outperforms 50.72% of 2,484 companies in the Software industry. Moreover, Accenture PLC has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 5.4, and the rate over the past five years is 9.3. This trend accentuates the company's continued capability to drive growth.
Conclusion
Accenture PLC's financial strength, profitability, and growth metrics, as highlighted by the GF Score, underscore the firm's unparalleled position for potential outperformance. With a strong balance sheet, impressive profitability, and robust growth prospects, Accenture PLC is well-equipped to navigate future challenges and capitalize on opportunities. For investors seeking companies with strong GF Scores, GuruFocus Premium members can explore more options using the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
