Is Accenture Stock a Buy?

Beyond the coronavirus-induced short-term uncertainties, Accenture (NYSE: ACN) is poised to profit from the modernization and digitization of enterprises in many industries, thanks to its shift to growth technologies. In addition, with its strong free cash flow and large cash balance, the company won't face any financial difficulty even if a prolonged recession materializes. Yet prudent investors should remain cautious, as the stock price doesn't offer any margin of safety.

Over the last several years, the consulting and outsourcing specialist has been growing its business thanks to its focus on growth technologies, such as cloud and cybersecurity, under an initiative it calls "The New." As a result, revenue grew from $32.9 billion in fiscal 2016 to $43.2 billion in fiscal 2019, with "The New" representing 65% of total revenue in 2019, up from 40% in 2016.

Granted, with its operations in 51 countries and in many industries, the company is exposed to the global economy. But despite the coronavirus pandemic, management expects revenue to grow by 3% to 6% during this fiscal year.