Shares of Accenture plc ACN hit a new 52-week high of $106.48 on Oct 9, eventually closing at $104.78. The company’s shares have been witnessing an upward movement — up 7.1% — following the better-than-expected fourth-quarter fiscal 2015 results reported on Sep 24.
The world’s leading management consultancy, technology and outsourcing services provider returned approximately 37.3% over the past one year and 19.2% year-to-date. The average trading volume for the last three months aggregated nearly 2,620K shares.
The company reported fourth-quarter earnings per share of $1.15, which beat the Zacks Consensus Estimate of $1.11. Also, on a year-over-year basis, earnings increased 6.5% from $1.08. The year-over-year improvement primarily came on the back of increased operating income, higher revenue base and lower share count.
Accenture’s fourth-quarter net revenue increased 1.4% year over year to $7.889 billion and surpassed the Zacks Consensus Estimate of $7.648 billion. Net revenue also came ahead of management’s guided range of $7.45 billion to $7.70 billion, primarily aided by a 4% increase in Consulting revenues ($4.2 billion), which more than offset a 1% decline in Outsourcing revenues ($3.7 billion).
Accenture continues to reward shareholders with dividends and share repurchases. The company bought back 6.6 million shares for $664 million in the reported quarter. Also, the company approved approximately $5 billion of additional share repurchase. The company increased its semi-annual cash dividend by 8% to $1.10 per share during the quarter.
The company’s solid performance across insurance, banking and healthcare segments reflects strong demand for its services, boosting long-term growth prospects. Furthermore, considering the growing need for digital marketing, Accenture’s efforts to enhance its digital marketing capabilities through acquisitions are encouraging.
However, we remain slightly cautious about the stock due to the intensifying competition and an uncertain IT spending environment.
Currently, Accenture carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the consulting industry are CBIZ Inc. CBZ, NV5 Holdings Inc. NVEE and FTI Consulting Inc. FCN. While CBIZ and NV5 Holdings sport a Zacks Rank #1 (Strong Buy), FTI Consulting holds a Zacks Rank #2 (Buy).
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