- Accenture reported Q1 2019 results that beat the top- and bottom-line estimates, but management's forward guidance was not well-received by the market.
- I believe that the "disappointing" guidance is a short-term headwind that is creating a buying opportunity in a company that has a promising growth profile.
- There are several risk factors that need to be considered, but I plan to stay long the stock.
Accenture ($ACN) recently reported better-than-expected Q1 2019 operating results (i.e., top- and bottom-line beats), but the stock finished the trading day down by almost 5%. The broader market selloff definitely came into play with the drop in the stock price, but analysts were also concerned about management's "disappointing" revenue outlook.
After the recent drop, ACN's shares are now slightly underperforming the market on a YTD basis.
There are company-specific risk factors that need to be consider, especially given the broader market uncertainty, but I believe that Accenture's management team has a story to tell. This unique company has great long-term business prospects and, in my opinion, Accenture's growth profile should not be overlooked, even after factoring in management's disappointing revenue guidance.
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