After over a year of downtrending, Accenture (NYSE: ACN) shares have hit and confirmed their bottom. The move is driven by better-than-expected results proving that the use and adoption of tech are as robust as ever. The takeaway for investors is that growth is still on the table, records are being set, cash flow is strong, and the dividend is healthy. 

The yield isn’t exciting, 1.75% isn’t far above the broad market average, but it's among the safest yield in the tech industry and coupled with share repurchases that more than double the value to shareholders. Repurchases totaled $1.1 billion in Q2, or about 0.7% of the market cap compared to the $0.708 billion paid in dividends.

Accenture Has Solid Quarter, Guides For Growth 

Accenture had a good quarter with revenue of $22.1 billion, up 5% compared to last year and 140 basis points better than expected. The strength was driven by gains in Growth Markets, up 14%, with 12% growth in the EU and 5% growth in North America helping the total. Resources was the most significant growth market by industry, with Health and Public services and Financial Services growing by solid double-digits. Net new bookings indicate future business, are up 13%, and set a company record. 

The margin was good. The GAAP margin declined by 150 basis points, but the adjusted margin was flattish with a 10 basis point increase. The takeaway is that adjusted earnings are up 6% YOY and beat by $0.20, leading to improved guidance for the year. The company expects sequential revenue growth of at least 2% with full-year adjusted earnings of $11.41 to $11.63, bracketing the consensus of $11.46. 

Analysts and Institutions Are Buying Accenture

Marketbeat’s analyst tracking tools haven’t picked up any reports since the Q2 release and guidance update but rest assured they are coming. Based on the results, the recent uptick in sentiment from Hold to Moderate Buy may turn into a trend of upgrades and price target increases that lead the market to higher price levels. Until then, the consensus price target is about 16% above the current action. 

On the other hand, the institutions are more obviously bullish on this stock, trading at multi-year low levels. They’ve been net buyers for the last year and the last 3 consecutive quarters, and their activity has been ramping. Purchases rose from $2.4 billion in Q3 2022 to roughly $5.75 billion in Q1 2023, bringing total holdings up to 74% and growing. Buying is also broad-based and indicative of a deepening market conviction. 

Accenture Cost-Cutting Efforts To Help Drive Growth 

Accenture released a shocking figure when it announced it would lay off 19,000 workers over the next 18 months. The move is part of a cost-cutting plan that is targeting corporate functions. The cuts will offset ongoing hiring efforts centered on operational quality and the company’s ability to grow. 

The stock surged more than 7% on the news and shows a bottom near the $260 level. The next hurdle is the 150-day moving average, and if it can be crossed, a reversal may form. If not, Accenture shares may remain range bound at current levels until later in the year, and more results are available.