QS Research · Michael Burry's Scion Capital analyst template · 2006
Accenture plc (ACN)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: PASS
Conviction medium · base case 0% · downside -27% · upside +18%
Using section 13's FY2026 TTM base — EBIT $11.41B (N9), net income $8.37B (N11), FCF $11.62B (N14) — and no cycle average, ACN at $260.50 (N1) is roughly fair: 13.4x EV/EBIT (N23) and 19.8x P/E (N24) already price the cash machine, and even the FY2027 EPS guide of $14.39-$14.81 at 20x is only about $288-$296, or +11% to +14%. The downside arithmetic is 10x EV/EBIT x $11.41B = $114.1B plus $12.73B net cash (N16 less N17) = $126.8B equity, about $199/share (-24%), with a 14.1x P/E cross-check at about $185 (-29%); upside is 16x EV/EBIT = $182.6B plus $12.73B = $195.3B, about $307 (+18%). That gives base about 0%, downside -24% to -29%, upside +18%: the long rule fails on base (+30% needed), the short rule fails on base (-30% needed), and the cash yield/buyback limit downside without creating a discount. Call pass, not watch: the multiple is not distressed and the FY2027 guide is a growth deceleration, not a temporary mispricing.
Key numbers
- Share price: $260.50
- Market cap: $165.95B
- Latest financial period: FY Aug 2026 to Aug 31, 2026
- Revenue (FY Aug 2026): $74.18B
- EV / EBITDA (FY Aug 2026): 12.8x
- P/E (FY Aug 2026): 19.8x
- Price / book: 5.26x
The 15 boxes
- ✓ 1. Long-form business notes
Accenture sells reinvention and technology work — consulting, managed services, assets and platforms — to more than 9,000 clients, roughly three quarters of the Fortune Global 100 and 500 and every G7 government, through three geographic reporting segments (Americas, EMEA, Asia Pacific) and five industry groups. FY2026 (ended 2026-08-31) revenue was $74.18B with operating income of $11.41B, net income of $8.37B and operating cash flow of $12.36B against only $742.7M of capex; FY2021 was $50.53B of revenue and $7.62B of operating income. Between the FY2021 and FY2026 annual reports the external framing changed more than the P&L mechanics: four service lines (Strategy & Consulting, Interactive, Technology, Operations) were replaced by seven Reinvention Partners plus three Reinvention Engines, the segment names changed (North America/Europe/Growth Markets to Americas/EMEA/Asia Pacific), acquisitions got larger and fewer ($4.2B across 46 in FY2021 versus $4.9B across 17 in FY2026), and ecosystem-partner concentration (65% of FY2026 revenue from 18 partners) and a new 'network of businesses' (6% of FY26 revenue) were newly disclosed.
- ✓ 2. Competitive advantage
Accenture's advantage is scale and breadth of delivery rather than hard lock-in: the FY2026 10-K claims no other company offers the full range of services at scale it does, and the numbers back the scale (revenue $50.53B FY2021 to $74.18B FY2026; operating income $7.62B to $11.41B). But scale did not buy pricing power — operating margin (computed from S27) stayed in a roughly 13.7%-15.4% band across FY2021-FY2026, with an actual dip in FY2023 ($8.81B operating income on $64.11B revenue vs $9.37B on $61.59B in FY2022). The model is asset-light and cash-generative: FY2026 operating cash flow $12.36B against capex of $742.7M, on FY2026 equity of $31.57B versus net income of $8.37B. Switching costs look modest: clients retain Accenture non-exclusively, consulting contracts are typically under 12 months with 30 days' termination notice, and its own filings list offshore Indian providers, accounting firms, AI-native companies and clients' captive GCCs as competitors.
- ✓ 3. 10-Q takeaways
Q3 FY2026 (quarter ended 2026-05-31) showed revenue of $18.718B, up 6% in USD and 3% local, with operating margin 17.0% vs 16.8% and diluted EPS $3.80 vs $3.49; new bookings fell 2% USD/3% local as managed-services bookings dropped 15%/16%. Nine-month GAAP operating margin was 15.4% vs 15.7%, held back by $308M of business optimization costs; adjusted operating margin was 15.9% and adjusted EPS was $10.67. Cash was $10.2B at May 31 2026 vs $11.5B at Aug 31 2025, nine-month operating cash flow was $9.268B, and the company returned $2.2B in Q3 via $1.0B dividends and $1.2B share purchases. Risk factors had no material changes.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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