Accenture Q1 Earnings Preview: Buy Now or Wait for the Results?

Accenture plc ACN is set to report first-quarter fiscal 2026 results on Dec. 18, before market open.The Zacks Consensus Estimate for earnings is pegged at $3.74 per share, suggesting 4.2% growth from the year-ago quarter’s reported level. The consensus estimate for revenues is $18.6 billion, hinting at 4.9% year-over-year growth.Over the past 60 days, two EPS for the first quarter of fiscal 2026 have been revised upward, without any downward revisions. During this period, the Zacks Consensus Estimate moved up marginally. These upward revisions demonstrate analysts' increased confidence. 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 3.2%.Lower Chance of Q4 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 currently has an Earnings ESP of -1.53% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.High Demand Across Regions to be ACN’s Q1 Growth DriverWe anticipate revenues from the Americas to grow 4.2% to $9.1 billion. Revenues in this region are expected to have been driven by growth in Banking and Capital Markets, industrials, and Software and Platforms.We estimate revenues from the EMEA region to be $6.7 billion, suggesting a 4.6% rise from the year-ago quarter’s actual. Growth in insurance, utilities and consumer goods, life sciences, and retail and travel services is expected to have fueled this region’s revenue growth.We anticipate revenues from the Asia Pacific to rise 3.7% to $2.6 billion from the year-ago quarter’s actual. Improvements in Banking and Capital Markets, Public Services, and Utilities are anticipated to have led this region’s revenue growth.ACN’s Stock Comparison With PeersAccenture shares have declined 23% over the past year compared with the 16.7% dip of its industry and against the 17.6% rise of the Zacks S&P 500 composite. The company has underperformed its industry peers, Cognizant Technology Solutions CTSH and Genpact G, which have reported 6.4% and 7.6% growth, respectively.1-Year Share Price Performance Image Source: Zacks Investment Research Over the past six months, ACN has dipped 12.2% compared with the 5.2% decline of the industry and against 18.7% growth of the Zacks S&P 500 composite. The stock has failed to beat its industry peers, as Cognizant Technology Solutions and Genpact have gained 7.1% and 11.6%, respectively.ACN is currently trading at a trailing 12-month price-to-earnings ratio of 19.23X, lower than the industry’s 25.31X. However, the stock is trading at a premium when compared with Cognizant Technology Solutions and Genpact’s 15.02 and 12.16X, respectively.P/E - F12M Image Source: Zacks Investment Research Accenture’s Investment ConsiderationsACN’s managed services business is significantly enhanced by the growing demand for modernization and application maintenance, cloud enablement, and cybersecurity-as-a-service. In fiscal 2025, revenues in this segment gained 9% year over year. For the first quarter of fiscal 2026, the same is expected to move up 2.3% year over year.The company maintains a strong balance sheet position, with cash and equivalents of $11.5 billion as of Aug. 31, 2025, and current debt of $114 million. It highlights the company’s strong liquidity position, which is further bolstered by the fact that its current ratio for fiscal 2025 was 1.42, improving from the preceding year’s 1.1. Having a current ratio of more than 1 makes Accenture’s prospects of covering short-term obligations very high.Accenture’s buyout strategy is impressive, as it acquires multiple companies in a given year. In fiscal 2025, the company made 23 acquisitions for $1.5 billion. In November, the company acquired RANGR Data, which expands CAN’s engineering talent and capabilities, strengthening its position to drive enterprise reinvention for customers.This buyout strategy comes with a drawback of high integration risks. Investors may consider this a red flag since heightened integration risks may hamper long-term organic growth. ACN operates in a labor-intensive and foreign talent-dependent industry. A key risk that the company struggles to manage is higher talent costs due to a competitive talent market. The fast-paced growth of AI enables clients to improve their performance independently, which reduces their reliance on Accenture.Hold on to ACN for NowAccenture is expected to witness growth in services across its geographic segments. Rising demand for its managed services business is a key driver of the top line. A strong cash position with substantially lower current debt results in a robust liquidity position, providing a leeway to cover short-term obligations.Despite the company’s rapid acquisition strategy improving its operational and financial position, integration risks are high, which can deteriorate growth, waving a red flag for investors. Higher talent costs resulting from a competitive talent market and a lack of reliance on the company by potential clients due to AI add to investor concerns.We recommend investors refrain from buying the ACN stock since it is facing challenges ahead of its earnings release on Dec. 18. Investors are asked to monitor ACN’s share price movement post earnings to ascertain a preferable entry point, as a hasty decision may affect portfolio gains.Zacks' Research Chief Picks Stock Most Likely to "At Least Double"Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren’t winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%.See Our Top Stock to Double (Plus 4 Runners Up) >>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 Genpact Limited (G): 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