Accenture (ACN) reported its Q4 and full-year fiscal 2026 results on October 1, 2026, for the fiscal year ended August 31, 2026. Following the earnings release, its stock surged 15.78%.
Accenture generated $74.2 billion in revenue for the full year, up 6% in U.S. dollar terms and 5% in local currency. Full-year new bookings reached $84.5 billion.
In Q4 fiscal 2026, revenue was $18.7 billion, up 6% in U.S. dollar terms and 7% in local currency. Quarterly new bookings totaled $22.2 billion, up 4% in U.S. dollar terms and 5% in local currency.
Full-year net income was $8.522 billion, an increase of 8.8% year over year.
Accenture generated $11.6 billion in free cash flow in fiscal 2026. After deducting $2.1 billion in stock-based compensation (SBC), adjusted free cash flow was $9.5 billion.
The company returned $11.5 billion in cash to shareholders during the year, including $7.52 billion in share repurchases and $3.987 billion in cash dividends.
Is Accenture Undervalued?
Accenture currently trades at $212.30 per share, giving it a market capitalization of approximately $129.9 billion.
One possible reason for the sharp increase is that investor expectations had previously been quite pessimistic. Many believed Accenture would be significantly affected by AI large language models. The latest earnings results were solid, potentially giving the stock room to move higher.
Revenue grew 6.47% this fiscal year. Growth was slower in fiscal 2024 and fiscal 2023, at just 1.22% and 4.09%, respectively. Based on its financial results, Accenture’s revenue remains remarkably stable.
Valuation
For fiscal 2027, Accenture expects full-year revenue growth of 3% to 6% in local currency.
The company forecasts free cash flow of $11 billion to $11.8 billion. After deducting approximately $2 billion in stock-based compensation, adjusted free cash flow would be around $9 billion or more.
Accenture expects to return at least $9.5 billion to shareholders in fiscal 2027. After deducting approximately $2 billion in stock-based compensation, the actual shareholder return would be $7.5 billion.
With adjusted free cash flow of $9 billion and a 20x valuation multiple, Accenture would have a market capitalization of $180 billion. In other words, free cash flow may not necessarily increase in fiscal 2027.
Using the actual shareholder return of $7.5 billion and a 20x multiple gives a market capitalization of approximately $150 billion.
My view is that Accenture is a stable business, and a market capitalization of $180 billion would be more reasonable. That valuation does not seem particularly expensive. Based on its current market capitalization, the stock still has room to appreciate.
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