NYSE:ACN (Fair Value Update)

Going into Accenture’s Q4 FY2026 earnings, we expected continued strength across all industries, excluding the public services industry within the operating segment, which we expected to remain pressured by ongoing disruptions and geopolitical uncertainty affecting contracts with federal agencies.

Despite these relatively aggressive expectations, the latest results exceeded our expectations, particularly as public sector demand strengthened enough to completely offset the anticipated weakness within the segment. As a result, every industry in which Accenture operates delivered positive year over year revenue growth for the full fiscal year 2026. The market reacted strongly, with the stock rising 18% following the report.

New bookings and future performance obligations reached an all time high during the quarter after showing some stagnation through the first three quarters of FY2026. This was driven primarily by stronger demand for Accenture’s managed services, which more than offset continued weakness in consulting.

Key workforce metrics also remained supportive. Labor utilization remained near full capacity and increased by approximately 200 basis points since Q1 FY2025, while quarterly annualized voluntary attrition declined to 13% from approximately 16% in the middle of last year. This combination indicates stable and efficient workforce deployment without requiring extraordinary workforce expansion, which should provide further support to operating margins and earnings.

As a result, we continue to maintain our fair value estimate of $529 per share. While the stock has appreciated materially following the earnings report, our valuation continues to indicate meaningful upside from the current market price and supports our view of a continued recovery toward intrinsic value.