Better Bet Than Accenture Stock: Pay Less To Get More From VRRM, CACI
VRRM, CACI are ACN’s peers in IT Consulting & Other Services industry that have:
1) Lower valuation (P/EBIT) compared to ACN
2) But higher revenue and operating income growth
This disconnect between valuation and performance could mean that you are better off buying VRRM, CACI stocks vs. ACN
Key Metrics Compared
- Is Wall Street Underestimating Accenture Stock’s Potential?
- Accenture Stock Looks Undervalued, Ready to Move Up?
- Has Accenture Stock Quietly Become a Value Opportunity?
- Is Accenture Stock Poised for a Rally?
- Is the Market Overlooking Accenture Stock’s Next Move?
- A Decade of Rewards: Accenture Stock Returns $57 Bil to Investors
| Metric | ACN | VRRM | CACI |
|---|---|---|---|
| P/OpInc* | 17.2x | 16.9x | 14.0x |
| LTM OpInc Growth | 14.6% | 22.3% | 25.7% |
| 3Y Avg OpInc Growth | 6.2% | 18.8% | 15.8% |
| LTM Revenue Growth | 4.1% | 6.9% | 14.2% |
| 3Y Avg Revenue Growth | 5.9% | 12.4% | 11.0% |
OpInc = Operating Income, P/EBIT = Price To Operating Income Ratio
This is just one approach to evaluate investments. Trefis High Quality Portfolio evaluates much more, and is designed to reduce stock-specific risk while giving upside exposure
Is The Mismatch In Stock Price Temporary
One way to check if Accenture stock is expensive now versus the other tickers would be to see how these metrics compared across companies exactly a year ago. Specifically, if there has been a marked reversal in the trend for Accenture in the last 12 months, then there is a chance that the current mismatch is likely to reverse. On the other hand, a persistent underperformance in revenue and operating income growth for Accenture would reinforce the conclusion that the stock is expensive compared to its peers, but may not revert soon
Key Metrics Compared 1 Yr Prior
| Metric | ACN | VRRM | CACI |
|---|---|---|---|
| P/OpInc* | 20.3x | 21x | 13.5x |
| LTM OpInc Growth | 13.6% | 23.5% | 28.8% |
| 3Y Avg OpInc Growth | 7.5% | 28.4% | 13.5% |
| LTM Revenue Growth | 2.7% | 7.6% | 14.0% |
| 3Y Avg Revenue Growth | 7.5% | 17.5% | 10.1% |
OpInc = Operating Income
Additional Metrics To Consider
| Metric | ACN | VRRM | CACI |
|---|---|---|---|
| P/S | 2.6x | 4.5x | 1.3x |
| Market Cap (Current) | $ 175.3 Bil | $ 4.0 Bil | $ 10.6 Bil |
| LTM Revenue | $ 67.22 Bil | $ 892.73 Mil | $ 8.36 Bil |
| LTM Opinc | $ 10.18 Bil | $ 236.13 Mil | $ 755.26 Mil |
| LTM Op Margin | 15.1% | 26.5% | 9.0% |
OpInc = Operating Income
Alternate buying based on valuation, while attractive, needs to be evaluated carefully from multiple angles. Such multi-factor analysis is exactly how we construct Trefis portfolio strategies. If you want upside with a smoother ride than an individual stock, consider the High Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.