Accenture (ACN) Lagging In Pre-Market Activity

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Accenture ( ACN) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Accenture as such a stock due to the following factors:

  • ACN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $242.2 million.
  • ACN traded 27,624 shares today in the pre-market hours as of 8:06 AM.
  • ACN is down 2.6% today from yesterday's close.

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More details on ACN:

Accenture plc provides management consulting, technology, and business process outsourcing (BPO) services worldwide. The company operates through Communications, Media & Technology; Financial Services; Health & Public Service; Products; and Resources segments. The stock currently has a dividend yield of 2.3%. ACN has a PE ratio of 18.0. Currently there are 8 analysts that rate Accenture a buy, no analysts rate it a sell, and 9 rate it a hold.

The average volume for Accenture has been 2.4 million shares per day over the past 30 days. Accenture has a market cap of $50.5 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.27 and a short float of 2.7% with 5.63 days to cover. Shares are down 3.6% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Accenture as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in net income, growth in earnings per share and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 12.3%. Since the same quarter one year prior, revenues slightly increased by 6.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • ACN's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.26, which illustrates the ability to avoid short-term cash problems.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the IT Services industry average. The net income increased by 0.9% when compared to the same quarter one year prior, going from $810.26 million to $817.34 million.
  • ACCENTURE PLC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, ACCENTURE PLC increased its bottom line by earning $4.93 versus $3.84 in the prior year. For the next year, the market is expecting a contraction of 8.1% in earnings ($4.53 versus $4.93).
  • In its most recent trading session, ACN has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

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