The Stock Market Live | 💰 Everything Money💰 LIVE | Summary and Q&A

TL;DR

Accenture stock is overpriced and not a good investment option due to its high valuation and low growth prospects.

Key Insights

• ✋ Accenture's stock is overpriced with a high valuation compared to its growth prospects.
• 😘 The company's revenue growth has been modest, with low single-digit growth expected in the future.
• 🥶 Its strong free cash flow and stable financial position mitigate some risks, but the stock is still not worth the hype.

Transcript

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Questions & Answers

Q: Why is Accenture considered overpriced?

Accenture's stock is overpriced due to its high valuation, with a five-year average P/E ratio of 46, compared to a desired ratio of 22.5 or below.

Q: What is the future growth potential of Accenture?

The company's revenue has been growing at a rate of 5-7% per year, which is relatively low for an IT services firm. This does not justify the high valuation.

Q: How does Accenture manage its long-term liabilities?

Accenture has $7.3 billion in long-term liabilities, which is covered by its strong free cash flow of $6.2 billion. This indicates financial stability.

Q: Is Accenture a good investment option?

Based on a conservative valuation and low growth prospects, Accenture is not a good investment option at its current price. The stock is overpriced and does not offer sufficient potential returns.

Summary & Key Takeaways

• Accenture is a leading global IT services firm that provides consulting, strategy, technology, and operational services.

• The company has seen revenue growth of 34% to 48% over the past five years, but its net income and shares outstanding have also increased.

• It has a strong free cash flow of $6.2 billion over the past five years, but its market cap of $211 billion is overpriced based on a conservative valuation.