Are You Overpaying For Accenture Stock Versus Its Rivals?
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Accenture (ACN) stock trades at 18.6 times earnings. The company belongs to a peer group where IBM, Cognizant and Booz Allen Hamilton also earned a profit in each of their last four reported quarters. Among those profitable rivals, only IBM is priced higher. Accenture ranks second of five on revenue growth, yet places only third on operating margin. So what does the extra price over Cognizant, the cheapest of those rivals, buy you?
Accenture Costs More Than Cognizant For Faster Growth
Cognizant trades at 11.4 times earnings, so a dollar of Accenture’s earnings costs about 63% more. For that price, you get faster growth. Over each company’s last four reported quarters, Accenture grew revenue 6.5%, compared with 5.0% for Cognizant. Both figures are in dollars. Excluding exchange-rate moves, Accenture grew 5%, so currency lifted its figure. You do not get a higher margin. Cognizant kept more of each sales dollar as operating profit: 16.3% against 15.8% for Accenture.
IBM is the only comparable rival priced above Accenture. It trades at 21.8 times earnings and grew a little faster, at 6.8%. IBM also has the highest operating margin in the group. DXC Technology carries a higher P/E as well, but DXC lost money in one of its last four quarters, so that P/E is not comparable. Inside this group, Accenture’s rank on price matches its rank on growth, not its rank on margin.
| ACN | IBM | CTSH | BAH | DXC | |
|---|---|---|---|---|---|
| Four Fiscal Quarters | ended 2026-08-31 (Q1 FY2026 to Q4 FY2026) | ended 2026-09-30 (Q4 FY2025 to Q3 FY2026) | ended 2026-09-30 (Q4 FY2025 to Q3 FY2026) | ended 2026-09-30 (Q3 FY2026 to Q2 FY2027) | ended 2026-09-30 (Q3 FY2026 to Q2 FY2027) |
| Market Value (USD billion) | 155 | 243 | 29.3 | 10.6 | 2.37 |
| P/E | 18.6 | 21.8 | 11.4 | 13.5 | 21.2 (not in the P/E rank) |
| Revenue Growth | 6.5% | 6.8% | 5% | -6.2% | -2.8% |
| Operating Margin | 15.8% | 18.3% | 16.3% | 9.3% | 1.5% |
| Total Return, Incl. Dividends, 2025-10-29 to 2026-10-30 | 7.9% | -14.2% | -7.1% | 10% | 13.7% |
Where Accenture’s Growth Comes From
Accenture bought part of its growth. Fiscal 2026 revenue grew 5% in local currency, which strips out exchange rates. Management said about 3 points of that total were organic, representing growth from the business Accenture already owned. The company spent $4.9 billion on acquisitions over the same year. It kept buying after the year ended, adding the construction technology consultancy Avicado in October.
Accenture sells two kinds of work: consulting and managed services. In its managed services business, the company runs clients’ applications, infrastructure and operations for them. This slightly larger segment grew revenue 8% in dollars in fiscal 2026, against 5% for consulting. Management said much of the growth comes from building clients’ data foundations and the systems they need to use AI at scale.
Management said pricing was stable overall in fiscal 2026, though Accenture saw lower pricing in many areas of its business during the fourth quarter. Compared with Cognizant, the extra you pay buys faster growth.
What Accenture Expects For Fiscal 2027
Accenture again expects to get much of its fiscal 2027 growth from acquisitions. Management guided revenue growth of 3% to 6% in local currency, and expects businesses it buys to add 2 to 2.5 points of that. Management built the low end of that range to allow for clients cutting back on optional projects. The top end assumes that spending stays stable or improves slightly. On its own adjusted measure, management also expects operating margin to widen by 10 to 30 basis points.
Accenture is expected to report its fiscal first quarter in December 2026. For that quarter, management guided revenue of $18.95 billion to $19.6 billion.
The price appears to assume that Accenture keeps outgrowing Cognizant while earning a slightly thinner margin. Accenture has done that over the last four quarters, though part of its growth was bought. Revenue growth in local currency, along with how much of it comes from acquisitions, is the measure to watch when Accenture reports in December.
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