Accenture Pre-Q2 Earnings: Is the Stock a Portfolio Must-Have?

Accenture plc ACN is set to report second-quarter fiscal 2025 results on March 20, before market open.See Zacks Earnings Calendar to stay ahead of market-making news.The Zacks Consensus Estimate for earnings is pegged at $2.84 per share, indicating 2.5% growth from the year-ago quarter’s reported level. The consensus estimate for revenues is $16.6 billion, indicating 4.9% year-over-year growth.Two consensus estimates for earnings per share in the second quarter of fiscal 2025 moved north in the past 60 days versus three southward revisions. The Zacks Consensus Estimate for its 2025 bottom line has increased marginally in the past 60 days. Image Source: Zacks Investment Research ACN’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average surprise of 2.7%.Accenture PLC Price, Consensus and EPS Surprise  Accenture PLC price-consensus-eps-surprise-chart | Accenture PLC QuoteLower Chance of Q2 Earnings Beat for ACNOur proven model does not conclusively predict an earnings beat for Accenture this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter.ACN has an Earnings ESP of -2.84% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Reinvention Partnerships to be ACN’s Key Driver in Q2In the first quarter of fiscal 2025, Accenture witnessed its clients prioritizing large-scale transformations and considering the company to be their reinvention partner of choice. This strategy was fruitful in terms of bookings, as the company clocked it to have reached $18.7 billion, increasing from the year-ago quarter’s $18.4 billion. Bookings included 30 clients, with quarterly bookings surpassing $100 million.Accenture’s emphasis on being the reinvention partner is a vital element of its strategy for achieving stronger growth. This reinvention partner strategy plays an important role in ACN’s growth plan. We anticipate the company to increase bookings to $23.1 billion in the second quarter of fiscal 2025. ACN will witness top-line growth from these large bookings throughout the year. Accenture’s relationships with its clients positions it to gain from higher discretionary spending.ACN’s Stock Comparison With PeersThe stock has lost 8.3% in the past three months against the industry’s 12.5% fall and the Zacks S&P 500 composite’s 4.4% decline. Shares of its industry peers Realbotix Corp. XBOTF and Stem, Inc. STEM have risen 91.6% and 26.5% over the same period, respectively.Three-Month Price Performance Image Source: Zacks Investment Research Accenture’s Investment ConsiderationsThe GenAI market is expected to expand, witnessing a CAGR of 37.6% from 2025 to 2030. Accenture, being at the forefront to leverage GenAI, is anticipated to benefit from this market expansion. ACN’s partnerships with OpenAI, Sanctuary AI, and more have solidified the company’s position in the GenAI market. These collaborators provide access to AI models and solutions, allowing Accenture to develop solutions tailored to specific enterprise requirements.ACN’s expertise in the GenAI domain drove $3 billion in GenAI-related bookings in fiscal 2024 and $1.2 billion in the first quarter of fiscal 2025. We anticipate improvements in bookings due to Accenture’s ability to capitalize on the GenAI market expansion.Meanwhile, Accenture has an asset-light business model with low CapEx and high FCF, facilitating frequent acquisitions. The company spent $6.6 billion across 46 acquisitions in fiscal 2024, demonstrating its inclination toward boosting performance by buying out companies.Therefore, we can expect ACN to acquire more companies in the process of improving its AI services and expand in the market. In doing so, Accenture might face the risks of overpayment or making bad buyouts, mainly in the current turbulent AI market.Hold on to ACN for NowAccenture is well-positioned to leverage the GenAI market expansion, wherein partnerships that enable the company to improve its AI offerings will attract more clients. This strategy, coupled with ACN’s reinvention partnership strategy, will help it win more clients, thereby boosting the top line.While acquisitions to boost AI offerings are common for ACN, they do not guarantee improved performance, and carry the risk of overpayment and bad investment choices. Hence, we recommend investors to remain patient and monitor Accenture’s ability to navigate within the AI market, which should be instrumental in making investment decisions.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Accenture PLC (ACN): Free Stock Analysis Report Stem, Inc. (STEM): Free Stock Analysis Report Realbotix Corp. (XBOTF): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks