[avnfish]

I’m very bearish on Accenture for the following reason: the business model is a levered flywheel (high-paid salespeople and aggressive M&A buyouts powered by share price appreciation and low wage outsourcing). This is kicking into reverse due to revenue growth deceleration

Unlike a partnerships model, Accenture taps the public markets for financing to do M&A and pays its star salespeople with stock. Declining revenue growth rerates the stock price lower, which then makes the market more competitive (can’t buyout others) and acts as a disincentive to the salespeople, which then lowers the stock price further. This alone may be survivable, but at the same time, the company has more than half a million staff (!) employed in India/Philippines/etc at exactly the time when the market wants SOTA-level AI work instead of legacy ‘managed services’, and the federal government is cutting many $B of ACN contracts

Tl;dr: these guys aren’t getting IBM’d, they’re getting Xerox’d