Accenture plc (ACN)

Conclusion

Accenture plc is a Dublin-based provider of consulting and managed services across the Americas, Europe, the Middle East, Africa and Asia Pacific, with offerings in artificial intelligence and data, cloud, cybersecurity and digital engineering. The shares closed at 254.37 USD on 2026-11-09, giving a market capitalisation of 150.3 billion USD.

The verdict is undervalued. Today's multiples sit well below their own ten-year medians: the price-to-earnings ratio is 17.96 against a median of 26.18, a premium of -31.4%, and enterprise value to EBITDA is 10.75 against a median of 16.21, a premium of -33.7%. The DCF gives 301.37 USD per share at a discount rate of 9.91%. The fair value band runs from 274.15 to 411.22 USD with a midpoint of 342.68 USD, a margin of safety of 34.7% at the current price. The reverse DCF implies growth of 4.32% a year, against revenue growth of 7.98% a year over the past five years.

The strongest numbers are a return on invested capital of 27.24% against a WACC of 9.40%, free cash flow conversion of 138.9% on a trailing basis, and net debt to EBITDA of 0.04. The weakest are the three-year revenue CAGR of 4.98%, which is the slowest of the growth horizons, a Piotroski score of 6 out of 9, and stock-based compensation of 2.83% of revenue. If revenue growth stays near its three-year pace, the case for the fair value band weakens.

Financial health

Financial strength is green, held up by a net debt to EBITDA of 0.04, interest coverage of 38.5x and a current ratio of 1.43, with a quick ratio of 1.31 and debt to equity of 0.42. The Altman Z-score is 4.40, in the safe zone, although the model was designed for manufacturers and Accenture is a services company. Insolvency risk: low, about 0.2% by the estimate of the Ohlson model over one to two years. The balance sheet carries little leverage relative to its earnings, and the company does not report a debt maturity schedule, so near-term repayment obligations cannot be checked here.

Earnings quality

Earnings quality is green, supported by free cash flow conversion of 138.9% on a trailing basis and 132.0% over five years, and an accrual ratio of -5.75%, which points to cash earnings running ahead of reported profit. The Beneish M-score of -2.71 is in the unlikely range for manipulation. The Piotroski score is 6 out of 9, which is the only neutral signal. Free cash flow after stock-based compensation is 9.52 billion USD. The share count has fallen at a five-year CAGR of -0.9%, meaning buybacks have exceeded issuance. The company beat earnings estimates in all 8 of the last quarters, with an average surprise of 3.39%. Estimate revisions for next year are mildly positive, with 15 upward and 6 downward in the last 30 days.

Profitability

Profitability is green. The operating margin of 15.38% sits above its ten-year median of 14.69%, and the net margin of 11.28% is above its median of 11.11%. The gross margin of 32.05% is close to its median of 31.95%, and operating margin stability is 3.06%. The return on invested capital of 27.24% compares with a WACC of 9.40%, and the given spread is 17.83%, which the company is classed as creating value. Return on equity is 26.51%. The DuPont split shows a net margin of 11.28%, asset turnover of 1.008 and an equity multiplier of 2.33, so most of the return comes from margins and turnover rather than leverage.

Growth

Growth is green, driven by an EPS CAGR of 8.18% over five years and 8.21% over ten years. Revenue CAGRs are 4.98% over three years, 7.98% over five years and 7.86% over ten years. Free cash flow per share has grown at 10.13% over three years, 7.68% over five years and 11.91% over ten years. Revenue has grown in all 10 comparable years. The three-year revenue pace is the weakest of the horizons, and the company's next-year EPS growth estimate is 8.36%.

Valuation

Valuation is green. Today's price-to-earnings ratio of 17.96 compares with a ten-year median of 26.18, a premium of -31.4%. The price-to-book ratio of 4.76 compares with a median of 8.23, a premium of -42.2%. The DCF gives 301.37 USD per share at a discount rate of 9.91%, with 53% of value in the terminal value. The fair value from historical multiples is 383.99 USD. The fair value band runs from 274.15 to 411.22 USD with a midpoint of 342.68 USD, which is a margin of safety of 34.7%. These figures are order-of-magnitude estimates built on fixed assumptions, including a 5% equity risk premium and capped growth, not price targets. The reverse DCF implies growth of 4.32% against five-year revenue CAGR of 7.98%. The dividend yield is 2.65% and the payout on free cash flow is 34.31%.

Risks

The main risk is that growth slows further. A three-year revenue CAGR of 4.98% is below the five-year pace, and if it persists the reverse DCF growth assumption of 4.32% would look less conservative. A Piotroski score of 6 out of 9 gives little room for deterioration in earnings quality. Stock-based compensation of 2.83% of revenue dilutes shareholder returns if it rises. The DCF depends on the terminal value for 53% of its result, so small changes in long-term assumptions move the fair value band substantially. Some values are not available here: a debt maturity schedule and revenue by segment were not provided, so refinancing risk and the mix of growth between business lines cannot be assessed. This analysis rests only on the figures supplied and does not reflect events after the dates shown.