Accenture Stock Drops 19% YTD: Is Now the Right Time to Buy?

With Accenture’s ACN stock slipping 18.6% year to date, you may question whether this pullback presents a buying opportunity. To assess this, we evaluate the company's standing within the broader industry and its competitive landscape.Image Source: Zacks Investment ResearchAccenture’s decline mirrors the broader industry’s 18.5% drop and the 8% dip in the Zacks S&P 500 Composite. Some of its closest AI and IT services rivals have also experienced turbulence this year. DXC Technology Company DXC, a notable competitor in the enterprise AI and digital transformation domain, has seen a steeper fall of 27%. Similarly, Cognizant Technology Solutions Corporation CTSH, another prominent AI-focused peer, has faced a 9% decline in share price.The pressure across the industry suggests that macroeconomic headwinds are impacting not just Accenture but also key competitors like DXC Technology and Cognizant. However, Accenture competes aggressively, leveraging its deep AI capabilities and global presence.While the downturn in ACN, DXC and Cognizant stocks may raise concerns, it also opens a window for long-term investors who believe in the strategic positioning of these companies in the AI and digital services market.Let’s delve deeper into whether the correction in Accenture is a buying opportunity.ACN’s Growth Strategy: GenAI and Digital InnovationAccenture’s growth strategy focuses on delivering 360° value to its stakeholders, mainly through technology. The company focuses on long-term growth through building a digital core with the help of cloud, data and AI, technology evolution, and investment in talent. We believe this strategy positions Accenture as a trusted partner for its clients.ACN’s partnerships with OpenAI and Sanctuary AI have solidified its position in the GenAI market. These collaborators provide access to top-notch AI models and solutions, enabling the company to develop bespoke solutions that cater to specific enterprise needs. Accenture’s expertise in GenAI drove $3 billion in GenAI-related bookings in fiscal 2024 and $1.4 billion in the second quarter of fiscal 2025. The company’s financial capacity to allocate resources to gain a technical advantage over subscale players assists it in dominating the GenAI field.Accenture continues to benefit from robust demand across several key service areas, including application modernization and maintenance, cloud enablement and cybersecurity-as-a-service. As businesses navigate increasingly complex digital landscapes, Accenture’s expertise in these domains positions it as a preferred partner for enterprises transforming. Clients seek to improve operational efficiency and reduce costs by leveraging advanced technologies such as data analytics, automation, and artificial intelligence. These strategic priorities drive a steady increase in demand for Accenture’s managed services offerings globally.The company’s ability to deliver scalable, outcome-driven solutions has enhanced its appeal in the public and private sectors. Reflecting this strength, managed services revenues rose by 4% year over year in fiscal 2024 and 8% in the second quarter of fiscal 2025, signaling the effectiveness of Accenture’s client-centric approach. The momentum is expected to continue, with managed services revenues projected to grow by approximately 5.7% in fiscal 2025, supported by continued digital adoption.ACN Expands Capabilities Through AcquisitionsAccenture adopts a focused and disciplined acquisition strategy to expand its presence in high-growth areas and enhance its service capabilities. The company targets acquisitions that add specialized skills, advanced technologies, and deep industry or functional expertise. This approach enables Accenture to continuously evolve with changing market demands and strengthen its cloud computing, AI, cybersecurity and data analytics leadership. Each acquisition is carefully chosen to complement and accelerate Accenture’s core offerings, while helping clients drive innovation and operational efficiency. Accenture remains well-positioned to deliver end-to-end digital transformation solutions globally through this strategy.Accenture’s Robust Liquidity PositionIn the second quarter of fiscal 2025, the company’s current ratio of 1.48 underperformed the industry average of 2.29. However, due to an upsurge in cash and cash equivalents, the current ratio increased 17.5% from the year-ago quarter. ACN has a current ratio exceeding 1, which implies that the company might be easily able to pay off short-term debt.Image Source: Zacks Investment ResearchACN’s FY25 & FY26 Top & Bottom-Line Prospects Look StrongThe Zacks Consensus Estimate for Accenture’s fiscal 2025 revenues is pegged at $68.4 billion, implying 5.5% year-over-year growth. The consensus estimate for fiscal 2026 revenues is pinned at $72.1 billion, suggesting 5.4% year-over-year growth. The consensus estimate for ACN’s fiscal 2025 earnings is pegged at $12.7 per share, indicating a 6.4% year-over-year rise. For fiscal 2026, the bottom-line estimate stands at $13.5 per share, implying 6% year-over-year growth. Image Source: Zacks Investment ResearchACN Faces Talent and Tech Challenges Amid Rising CostsRising talent costs in a highly competitive labor market put pressure on consulting services providers like Accenture. As a labor-intensive industry, consulting heavily relies on skilled professionals, many of whom come from international talent pools. This dependency makes companies vulnerable to fluctuations in labor costs and immigration-related challenges.Additionally, while automation and artificial intelligence offer transformative potential, they introduce new complexities. These technologies empower clients to independently adopt innovative solutions, which can reduce reliance on external consultants. As a result, firms like Accenture face growing uncertainty in sustaining long-term client engagements amidst rapid technological change.ACN’s Acquisition Growth vs. Integration RisksWhile the aggressive acquisition strategy enhances revenue opportunities, diversifies business mix, and boosts profitability, it also introduces certain challenges. One key concern is the integration risk with each acquisition, as aligning new businesses with Accenture’s existing operations can be complex and time-consuming. Additionally, frequent acquisitions may divert management’s focus from driving organic growth, as considerable resources are dedicated to integrating and managing newly acquired firms. This ongoing balancing act could impact Accenture’s ability to grow sustainably in the long run.Retain ACN Amid Near-Term PressuresDespite recent share price weakness, Accenture’s long-term outlook remains resilient. The company is well-positioned in the growing AI and digital transformation space, supported by strategic partnerships, disciplined acquisitions and strong managed services momentum. However, rising talent costs and evolving client expectations add uncertainty to short-term performance. The broader IT services industry also faces macro headwinds, which are not unique to Accenture. Given the company’s strong fundamentals and future growth drivers, holding the stock seems prudent for now. Investors should monitor execution and market conditions before considering further exposure.Accenture carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want 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 Cognizant Technology Solutions Corporation (CTSH): Free Stock Analysis Report DXC Technology Company. (DXC): 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