Accenture Earnings: Softness Stays for Now, but Future Demand Isn’t Diminishing

Wide-moat Accenture reported fiscal 2024 third-quarter revenue results right in line with consensus estimates but missing on an adjusted earnings basis. While Accenture’s significant exposure to more discretionary consulting revenue leaves it vulnerable to the macroeconomic environment, bookings remain solid—especially in GenAI—propping up shares roughly 7% upon results. Overall, we have been consistent in our belief that Accenture’s current weakness will not dampen demand to come in AI and beyond—contrary to the market, which has been reflected in the ups and downs in the stock price this year. After factoring in mixed outlook updates, our $292 fair value estimate remains unchanged. We continue to believe that Accenture’s long term looks bright, as we think its solid brand power and breadth of research and development resources (which keep it at the forefront of enterprise technology) will continue to make it one of the most desirable vendors for massive digital transformation projects. Solid bookings this quarter supported our thesis on Accenture’s rosy future despite the near-term slump.