Is Accenture at an Attractive Price After Latest 29% Drop in 2025?

With Accenture's stock price back near $253, plenty of investors are weighing whether now is the time to buy, sell, or simply watch from the sidelines. If you have followed ACN, you know the ride has been bumpy. A 3.8% gain over the past week hints at renewed optimism, but that comes after a tougher stretch. The stock is still down 1.0% in the last month and off nearly 27.5% for the year to date. Looking even further back, Accenture’s five-year return stands at 18.5%. However, the last twelve months have been harsh, with a 29.4% decline.

Some of these recent moves can be traced to shifting sentiment across the tech and consulting sectors overall, as investors recalibrate what counts as sustainable growth in a changing market. Factors like increased competition for IT talent and evolving client expectations often swing sentiment for services firms like Accenture. These broader forces mean that while volatile, Accenture’s stock may still offer upside for those looking to get in at a more attractive price.

But is ACN’s current price actually a bargain? On a valuation scorecard, Accenture comes out with a value score of 4 out of 6. In other words, it appears undervalued according to four different checks. That may sound promising, but understanding what is “cheap” or “expensive” can change a lot depending on which lens you are using.

Let’s break down the main valuation methods for Accenture before exploring an even smarter way to size up its worth at the end of this analysis.

Why Accenture is lagging behind its peers

Approach 1: Accenture Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model is a valuation approach that estimates the worth of a business by projecting its future free cash flows and discounting them back to today's value. This technique offers a lens into what Accenture’s core cash generation could be worth in the current market environment.

For Accenture, the latest data shows free cash flow (FCF) at approximately $10.9 Billion. According to analyst forecasts, FCF is projected to continue its steady growth, reaching about $14.7 Billion in ten years. While projections from analysts generally extend five years into the future, additional estimates are extrapolated for long-term modeling purposes.

After factoring in all expected future cash flows and discounting them, the DCF model calculates an intrinsic value of $275 per share for Accenture. This is about 8.1% higher than the current market price, suggesting the stock is slightly undervalued at this level.

In practical terms, Accenture appears to offer a modest margin of safety right now based on its anticipated cash generation, but the discount is not dramatic.

Result: ABOUT RIGHT

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Accenture.

Simply Wall St performs a valuation analysis on every stock in the world every day (check out Accenture's valuation analysis). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes.

Approach 2: Accenture Price vs Earnings

The Price-to-Earnings (PE) ratio is a widely accepted metric for valuing profitable companies. It directly relates a company's stock price to its current earnings and serves as a quick indicator of how much investors are willing to pay for each dollar of earnings. This makes it especially useful for businesses with robust and consistent profitability like Accenture.

However, what constitutes a “normal” or “fair” PE ratio depends on the company's growth prospects and risk profile. Higher growth expectations typically command higher PE ratios, while increased risks or slowing growth can push these multiples lower. To fairly judge whether a stock looks expensive or cheap, it is important to compare its PE against relevant benchmarks and consider company-specific factors.

Accenture currently trades at a PE ratio of 20.5x. This is below the IT industry average of 32.9x and also below the peer average of 27.4x. At first glance, this suggests Accenture could be undervalued relative to its peers and the broader industry. However, benchmarks like the industry average can sometimes be misleading, since they do not account for differences in growth, profitability, or risk between companies.

This is where Simply Wall St’s “Fair Ratio” applies. The Fair Ratio, calculated as 38.3x for Accenture, takes into account all the key ingredients that matter such as expected earnings growth, risk, industry trends, profit margins, and the company’s scale. This approach provides a more holistic and tailored picture of what a fair multiple should be for Accenture, rather than relying solely on broad comparisons.

Comparing Accenture’s actual PE (20.5x) to its Fair Ratio (38.3x), the stock appears significantly undervalued based on what investors might reasonably expect it to trade at, given all the fundamentals.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Accenture Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is a straightforward, user-driven story that connects your personal view of a company, such as how fast you think Accenture can grow revenue or improve margins, with your financial forecasts and ultimately, your estimate of fair value. Rather than just relying on broad industry multiples or static models, Narratives let you express your own expectations for future earnings, margins, and growth, turning your perspective into a tailored valuation.

Narratives are designed to be easy and accessible for everyone and are available on Simply Wall St’s Community page, where millions of investors share and update their views. This tool empowers you to decide when to buy or sell by comparing your calculated Fair Value with the current market price. Your thesis stays fresh as new earnings reports or news arrive so your view evolves with the company itself.

For example, recent Narratives for Accenture range from a cautious fair value of $202 per share, reflecting concerns about margin pressures and lower expected growth, to a far more optimistic $344 per share, based on higher revenue forecasts and strong belief in the company’s long-term prospects. Whichever fits your view, Narratives allow you to invest based on your story, not just the numbers.

For Accenture, we will make it really easy for you with previews of two leading Accenture Narratives:

🐂 Accenture Bull Case

Fair Value: $343.90

Current Price is 26.5% below fair value

Revenue Growth: 7.5%

• Identifies strong catalysts in Generative AI, cloud migration, security, and healthcare, which could support multi-year revenue and EPS growth.
• Highlights sector tailwinds and also notes risks such as client caution on spending and competition in key business lines.
• Projects revenue rising to $115B and EPS to $26 over the next decade, with steady margin expansion and robust long-term prospects.

🐻 Accenture Bear Case

Fair Value: $202.38

Current Price is 24.9% above fair value

Revenue Growth: 5.4%

• Points out that while Accenture’s valuation has reset, the share price remains above its own estimate of fair value due to sector headwinds.
• Notes that growth is steady, but bookings have declined for two quarters, including cautious enterprise spending and margin expansion requiring further validation.
• Sees solid dividends and buybacks supported by free cash flow and highlights bookings momentum as the key factor for stock upside.

Do you think there's more to the story for Accenture? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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