Shares of Accenture(NYSE: ACN) have quietly surged toward their 52-week high at the start of 2025. The consulting juggernaut is delivering solid operational and financial momentum, emerging as a surprising leader in artificial intelligence (AI) by enabling clients to implement cutting-edge technology solutions.
With these encouraging developments, investors might wonder whether its stock price rally still has room to run, or if the opportunity for profit has already passed.
Let's consider what to do with Accenture stock from here.
With a talent pool of 799,000 employees in more than 120 countries, Accenture stands out as a global leader in professional services. Beyond its roots in management advisory and operations outsourcing, the company has evolved by helping major organizations navigate increasingly complex digital transformation needs. Strategies and solutions in areas like cloud computing, data analytics, cybersecurity, automation, and AI are in high demand and represent major growth drivers.
The impact has been impressive. In its fiscal 2025 first quarter (which ended Nov. 30), revenue climbed by 9% year over year, with strength across regions and industry groups. Earnings per share (EPS) surged by 16%, reflecting the ongoing shift toward more high-tech and value-added offerings that contribute to higher margins.
Image source: Getty Images.
AI has become a central part of the business, with clients seeking to integrate capabilities like generative AI into their existing systems, as well as a tool to enhance their own productivity and consulting efficiency.
The pace of new bookings was strong enough for management to hike its full-year guidance. Accenture now projects 2025 revenue growth of between 4% and 7%, accelerating from its 1% increase last year. The midpoint of management's EPS guidance range of $12.43 to $12.79 would be an 11% increase from 2024's result of $11.44.
Similarly, free cash flow is expected to leap higher this year, which likely played a role in the company's decision to increase its dividend by 15% to a new quarterly rate of $1.48 per share. The dividend yield at the current share price is a modest 1.5%, but those payouts add to the attraction of the stock.
Ultimately, investors who are confident in Accenture's ability to continue capitalizing on its growth potential have plenty of reasons to buy and hold the stock today.
Metric
2024
2025 Estimate
Revenue growth (YOY)
1%
4% to 7%
EPS
$11.44
$12.43 to $12.79
EPS growth (YOY)
6%
9% to 12%
Free cash flow
$8.6 billion
$8.8 billion to $9.5 billion
Data source: Accenture. YOY = year over year.
Accenture's recent results speak for themselves, and 2025 is poised to be a big year for the company. That being said, the stock market is unpredictable in the short run, so it's critical for investors to examine investments closely and think carefully about what could go wrong.
A key risk for Accenture is its exposure to the global macroeconomic environment. Resilient conditions have been a tailwind driving client demand from businesses seeking to expand. However, there signs of a deteriorating outlook -- geopolitical conflicts and rising international trade barriers could translate into a slowdown for the consulting sector. That would be a headwind for the stock.
Another reason that caution may be warranted is that the market for IT services and digital transformation projects remains highly competitive. Accenture's traditional peer group includes consulting firms like Cognizant Technologies and Infosys, but it must also compete with major tech players like International Business Machines, Microsoft, and Oracle -- all of which offer similar AI implementation solutions.
Investors should also consider Accenture's premium valuation: It trades today at about 30 times its consensus 2025 EPS. That forward price-to-earnings (P/E) ratio is in the upper end of the range for its peer group. That isn't necessarily a sign that the stock is due for a sell-off, but it could limit its near-term upside.
Investors who doubt Accenture's ability to hit its earnings guidance or who believe it's at peak growth might consider moving on from the stock now.
After weighing the pros and cons of Accenture stock, I'm bullish, and believe it could make a compelling addition to a diversified portfolio. Strong quarterly results in 2025 could provide catalysts for stock price gains over the next year. The company's enterprise-level brand recognition, its solid fundamentals, and its proven adaptability to the evolving needs of its clients position it well to continue rewarding shareholders.
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Dan Victor has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Accenture Plc, International Business Machines, Microsoft, and Oracle. The Motley Fool recommends Cognizant Technology Solutions and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
