ACNNYSEThe short version
Accenture plc
Accenture sells the time of roughly 800,000 people to 9,000 clients, owning almost no physical assets. After a summer selloff, this fit test asks whether the drawdown is the kind of dislocation the framework is built to buy.
From a 2 April high of $201.33 the shares fell 38% to a $124.44 low on 30 June — an 18% single-session drop on the June print — then recovered a third to $165.92.
Mkt cap $104.9BNet cash $6.4BEV $98.5BP/E FY27E 11.3×
$165.92
Share price, Jul 31 2026
$104.9B
Market cap
4.9%
Adj. FCF yield vs 8.5% bar
~779K
People employed
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Snapshot
Accenture plc in numbers
Price
$165.92as of 2026-07-31
Mkt cap
$104.9B
Net cash
$6.4B
EV
$98.5B
| Year to Aug (USD) | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|
| Sales | 64.1B | 64.9B | 69.7B | 73.6B | 76.6B | 80.8B |
| EBITDA | – | – | – | 14.0B | 14.8B | 15.8B |
| EBIT | 8.8B | 9.6B | 10.2B | 11.5B | 12.2B | 13.0B |
| EBIT margin | 13.7% | 14.8% | 14.7% | 15.7% | 15.9% | 16.1% |
| EPS | 10.77 | 11.44 | 12.15 | 13.87 | 14.68 | 15.79 |
| EV/EBITDA | – | – | – | 7.0× | 6.6× | 6.2× |
| EV/EBIT | 11.2× | 10.3× | 9.6× | 8.5× | 8.1× | 7.6× |
| P/E | 15.4× | 14.5× | 13.7× | 12.0× | 11.3× | 10.5× |
| FCF yield | 8.6% | 8.2% | 10.4% | 10.7% | 11.2% | 12.0% |
| Gearing | −34.0% | −16.9% | −20.0% | – | – | – |
Consensus: S&P Capital IQ (CapIQ) · as of 2026-08-01Derived from run data; ratios use the latest price.
IThe business
The business
A $70B revenue business built on 800,000 people and almost no assets
$69.7B
FY2025 revenue
~779,000
People employed
$1.57B
Net property & equipment
0.86%
Capex / revenue
One dollar of fixed plant for every $44 of sales.
- It sells hours, not products. Payroll is $45.7B — 66% of revenue and 77% of operating cost. The whole model is managing the gap between what an hour charges and what it costs.
- Five industries, three regions. No single vertical dominates: Products leads at $21.2B, and the US is 45% of revenue with no other country above 10%.
- Growth needs no capital. Capex has fallen to 0.86% of sales; adding capability means hiring or buying a firm, not building a plant.
The economics
The variable that matters most — the price of an hour — the company says it can't measure
What each firm publishes about price
| Firm | Unit of price | Number published |
|---|---|---|
| Accenture | Contract margin only | None (direction) |
| Cognizant | Units delivered | 40% AI-assisted |
| HCLTech | Per-unit realization | 2–3% deflation |
- No rate card. Accenture states it cannot measure how much of revenue growth is price versus volume, and does not track unit or rate volume — the key operating variable is unobservable.
- Both proxies are pinned. Headcount grew 0.6% in a 7.4% revenue year, and utilization sits in the low-90s with management ruling out a structural lift from AI.
- Peers are quantifying the deflation. Rivals put AI price deflation at 2–3% a year in the same book of work — where over 60% of Accenture's contracts are fixed-price.
IIThe record
The record
The margin promise is kept on the line the company grades and pays itself on
Operating margin: adjusted (management) vs GAAP (as filed)
- Two lines, one direction. Adjusted operating margin expanded inside its 10–30bps band five years running; the filed GAAP line ended ~40bps below where it started.
- The wedge has a name. Roughly $2.4B of recurring 'business optimization costs' over four straight years is excluded from the presented margin — and from the operating-income metric that funds executive pay.
- The cash is real. Five-year free cash flow was 1.32x net income (1.06x after a full stock-comp charge) under a clean audit — which is why the presentation choice matters more than a footnote.
IIIThe story now
The fit
Does not fit the framework (P1 not met); contested: P2, P3a
Not met
Year-10 durability gate (P1)
4.9% vs 8.5%
Adj. FCF yield vs fortress bar
0.63
Prob. impairment temporary
Medium
Confidence tier
- One gate decides it. The framework treats year-10 durability as a gate nothing offsets; jurors split 3–1 not-met at probability 0.62, so genuine doubt resolves against it.
- The case for the business. Revenue compounded ~8% a year to $69.7B with no down years and near-zero capital intensity — a strong record that still doesn't clear 'very high conviction' on a labour-arbitrage model facing AI deflation.
- Nothing else fired. No exclusion hit, the universe screen is clean, and self-help clears — the name fails only the criterion the framework makes decisive.
The dislocation
An 18% single-session drop on a beat-and-raise print
The 18 June session fell 17.97%; the closing low of $124.44 was set 30 June.
- The event is dated but soft. On 18 June the shares fell 17.97% on ~8x volume even as Accenture beat EPS ($3.80 vs ~$3.71) and raised cash return; only the top of the revenue range was trimmed.
- Capitulation, with an asterisk. The drawdown depth qualifies, but the 2.36x volume-spike claim was refuted against a partial 84-session price file — so the setup rests on the fall, not a verified spike.
- Contested trigger. Two jurors saw a named macro fear (AI plus federal); two saw only an earnings beat — P3a came back contested.
The damage math
A 43% price cut sitting on top of a 1–2% estimate cut
Six-month move: consensus estimates vs the share price
- A re-rating, not a downgrade. Over six months consensus FY27 EPS moved −1.4% and revenue −1.7%, while the stock fell 43% from its $291.09 high — the multiple went from ~19.8x to 11.3x.
- Diagnosis above a coin-flip. The adversarial trial put the probability the impairment is temporary at 0.63 (spread 0.07): federal anniversaries in Q4, but AI deflation on a 60%+ fixed-price book is the unmeasured permanent risk.
- Short of the bar. 0.63 clears 'more likely temporary' but falls short of the ~0.65–0.70 the framework's fit thresholds ask for.
Cash consistency
Ten years of rising cash — until you subtract what the definition demands
Free cash flow, FY2016–FY2025
- Raw FCF is exceptionally stable. No negative year in a decade; the rolling five-year average climbed from ~$5.5B to ~$9.1B and never fell in any window.
- Contested on definition. The framework's measure is adjusted FCF — after stock comp and a ~$3.6B/yr acquisition average — which the feature file can't compute, so two jurors could not determine P2 while two read it met.
- The adjustment roughly halves it. Subtract ~$2.1B stock comp and the lumpy acquisition drag and FY2025 adjusted FCF is ~$5.1B, inheriting lumpiness the raw line masks.
Self-help
A $21B buyback that shrank the share count just 2.1%
Average repurchase price paid, by period ($/share)
The 31 July close of $165.92 sits below all eight bars.
- Self-help clears — narrowly. Net cash of ~$6.3B, covenant-free notes and a declining share count mean P4 is met with no rising-share-count hard fail.
- But the buyback mostly offsets dilution. $21.3B of purchases cut the base only 2.1% because ~$9.0B of stock comp ran the other way; $776M of FY2025 spend was tax withholding.
- Bought high. Open-market repurchases averaged $303.83 over five years against a $165.92 close — and FY2026 breaks pattern, spending ~1.8x free cash flow and taking on debt.
The clock
Two dated tests this autumn, and no verifiable long-dated options
What gets tested, and when
| Date | Event | What it tests |
|---|---|---|
| Oct 1, 2026 | Q4 FY2026 call | FY2026 result; first FY2027 framing |
| Oct 14, 2026 | Investor Day | FY2027 guidance; organic vs bought growth |
- Instrument context not verifiable. LEAPS beyond 18 months appear to exist and 30-day implied vol of ~52% sits in range, but neither could be confirmed from a dated citable source — I1 is not verifiable and does not block the verdict.
- The federal drag is dated to sunset. Management guides the ~8%-of-revenue federal unit back to growth in Q4 FY2026 — a self-reversing item already in the base.
- First real number lands 1 October. Initial FY2027 guidance tests the ~2%-organic, ~2%-bought framing the current price embeds.
IVThe price
Yield vs the bar
On the framework's definition, the yield sits ~360bps under the bar
Adjusted FCF yield vs the fortress bar
3-yr avg adjusted yield
4.0%
Current adjusted yield
4.9%
Unadjusted FCF yield
10.4%
- Below the fortress bar. Net cash sets the bar at 8.5%; adjusted FCF yield is 4.90% current and 4.02% on a three-year average — roughly 360–450bps short, with no jump toward the bar. All four jurors: not met.
- The counter is the definition. On an unadjusted basis FCF yield is ~10.4% and clears the bar — the entire shortfall is the stock comp and ~$3.6B/yr acquisition drag the framework mandates subtracting.
- The forward path doesn't close it. Consensus (unadjusted) yield rises above 10%, but re-derived on the adjusted definition it reaches only ~4.2% — P3d probability 0.245.
What you pay
$165.92 pays 11.3x forward earnings for a ~10% cash yield and bought growth
11.3x
FY2027 P/E
10.7%
Forward FCF yield
9.1%
Guided cash return / mkt cap
~1.85%
Est. FY2027 organic growth
- Return is yield and share count, not growth. At a 10.7% forward FCF yield and ~$9.5B guided return (9% of market cap), the payout dominates; consensus 4% FY2027 revenue growth is ~2 points bought.
- Re-rating math is unpublished. With adjusted FCF not computable the tally reports no price-at-bar; on FY2025 adjusted FCF of ~$5.1B, clearing the 8.5% bar implies a ~$60B cap — about 42% below today.
- The yield anchor may soften. FY2025's 1.42x cash conversion was lifted ~65% by a one-off $1.5B payroll accrual; management guides FY2026 back to 1.2x.
Both reads
A cheap cash yield, or a labour model being quietly repriced
The same facts, two ways
| Shared fact | Cautious read | Constructive read |
|---|---|---|
| Growth is bought | ~2 of 4 FY27 points acquired at undisclosed prices | Incumbency and ecosystem rank protect the account base |
| Cash conversion | FY25 1.42x lifted by a $1.5B one-off; guided to 1.2x | 5-yr conversion 1.32x, 1.06x after full stock comp |
| AI deflation | Peers quantify 2–5% in the same book of work | Framed as a tailwind; has outgrown peers five years running |
- Narrow disagreement on the numbers. Thirteen brokers cluster FY2028 operating margin at 15.7–16.2%; the contest is the multiple and durability, not the next two years' earnings.
- Neutral, wide targets. 25 targets: mean $178.89, range $130–$275; the July rally carried the quote above several of the most recent published targets.
What to watch
Cheap on cash yield, priced on a durability question the numbers have not yet answered
- 01Bookings/book-to-bill stay below 1.0 for 2+ consecutive quarters
- 02Federal fails to return to growth in Q4 or ex-federal organic LC growth turns negative
- 03Consensus forward FCF ($11-13B FY26-FY29) is cut materially rather than held/raised.
- 04share count inflects upward
This distills a fixed framework test built criterion by criterion across the full report.
Compiled from the full report · 2026-08-01 · For information, not investment advice.