Can Accenture PLC Stock Retain Its Recent Gains?

During recent months, the Accenture PLC (ACN) shares have made some notable gains. Yesterday was especially notable in that regard since during the session the stock advanced by more than 7.5%, closing at $217.32.

The possible reason behind this recent move was the release of the latest quarterly earnings of the firm. According to the official report, the firm’s revenues have reached $11,100 million, which was 4% higher compared to back in 2018, when this indicator stood at $10,695 million. Actually those numbers were influenced by the negative currency impact of 4%. So if we measure the company’s earnings in local currencies, then the rate of growth will be 8%, which is quite a significant achievement, especially considering the enormous challenges of the outbreak of COVID-19 pandemic.

The largest income growth came from North American countries, where the sales have climbed by 9%. Two main activities of the company are outsourcing and consulting.

Another major advantage the company has is the fact that it has a significant net interest income. Usually, non-financial companies do have a notable net interest expense and do not own enough assets to have any net interest income. This is very different from Accenture PLC.

For example, during the last reported quarter, the company spent $5,348,000 servicing its debt. At the same time, the firm received $21,402,000 in interest income. This means that during those three months, the company had a net interest income in excess of $16 million. The long term trend with this type of revenue is even more impressive. Just a year ago the net interest income of the firm was at $6.8 million. This means that in a matter of 12 months, the firm has increased its net interest revenue by 135%.

It seems like the company regularly invests its cash surpluses in income-producing assets. This can be a very prudent long term strategy that can pay significant dividends for years to come.

Recent Recovery of Accenture Share Price

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