Stagwell (STGW) AI Stock Analysis

• Market Cap: $1.54B
• Dividend Yield: N/A
• Average Volume (3M): 1.94M
• Price to Earnings (P/E): 37.1
• Beta (1Y): 1.05
• Revenue Growth: 6.76%
• EPS Growth: 1841.46%
• Country: US
• Employees: 11,857
• Sector: Communication Services
• Sector Strength: 97
• Industry: Advertising Agencies
• EPS (TTM): 0.30
• Shares Outstanding: 253,452,560
• 10 Day Avg. Volume: 2,731,007
• 30 Day Avg. Volume: 1,937,836
• PEG Ratio: 0.07
• Price to Book (P/B): 1.39
• Price to Sales (P/S): 0.37
• P/FCF Ratio: 4.36
• Enterprise Value/Market Cap: 1.97
• Enterprise Value/Revenue: 1.05
• Enterprise Value/Gross Profit: 2.86
• Enterprise Value/Ebitda: 8.03
• 1Y Price Target: $8.05
• Price Target Upside: 32.40% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 1.04
• Revenue Forecast (FY): $3.24B

• Rating: 57 Neutral
• Price Target: $6.50 ▲(6.91% Upside)
• Action: Reiterated Date: 03/11/26
• Date: Action: Reiterated 03/11/26

The score is primarily constrained by leveraged financials and thin net margins despite strong revenue and free-cash-flow trends. Technicals are supportive but look somewhat overextended, valuation appears rich at a ~37 P/E, and the latest earnings call/corporate actions are constructive (reiterated guidance, AI strategy, and an expanded buyback).

Positive Factors

Record Net New Business

A record LTM net new business pipeline indicates durable client demand and successful new-account wins. Large incremental contracts broaden the revenue base, improve cross-sell opportunities across agencies, and reduce concentration risk, supporting sustained top-line growth over multiple quarters.

Strong Cash Generation

Material free cash flow and improved operating cash generation provide lasting financial optionality: they can fund tech investments, buybacks, and gradual deleveraging without relying solely on equity raises. Consistent FCF also cushions the business against cyclical client spend swings.

AI & Tech Partnerships Driving Growth

A strategic pivot into AI and platform partnerships (Palantir) creates a technology-enabled moat, shifting revenue mix toward scalable, data-driven products. This supports higher recurring revenue potential, differentiates services, and underpinned the Marketing Cloud surge, improving long-term margin and client retention dynamics.

Negative Factors

High Leverage

Elevated leverage materially constrains financial flexibility and increases interest and refinancing risk. Given operating cash flow covers a modest portion of total debt (TTM ~0.18), meaningful deleveraging will likely require multiple years of sustained FCF, limiting capital available for M&A or large strategic investments.

Thin Net Profitability

Very thin reported net margins imply much of operating leverage is absorbed below EBITDA by interest, taxes or other costs. This compresses returns on equity, limits retained earnings for reinvestment, and makes profitability sensitive to modest cost increases or revenue softness over the medium term.

Communications Segment Weakness

Persistent softness in PR and reduced advocacy work reflects structural client behavior (elongated pitch cycles, slower decisions) that can depress revenue and margins in that segment. Continued weakness limits diversification of revenue streams and may slow consolidated margin recovery despite gains elsewhere.

Stagwell Business Overview & Revenue Model

Company Description

Stagwell Inc. provides digital transformation, performance media and data, consumer insights and strategy, and creativity and communications services. The company operates through three segments: Integrated Agencies Network, Media Network, and Communications Network. It designs and builds digital platforms and experiences that support the delivery of content, commerce, service, and sales; creates websites, mobile applications, back-end systems, content and data management systems, and other digital environments; designs and implements technology and data strategies; and develops software and related technology products, including cookie-less data platforms for audience targeting and activation, software tools for e-commerce applications, and text messaging applications for consumer engagement. The company also provides media buying and planning services; and strategic insights and guidance services that offers business content, product, communications, and media strategies. In addition, it offers strategy development, advertising creation, live events, cross platform engagement, and social media content services; and leadership, social media, executive positioning and visibility, strategic communication, public relation, and public affair services. Further, the company provides influencer marketing, brand insights, communications technology, and augmented reality services for in-house marketers, as well as tech-driven solutions. Stagwell Inc. is headquartered in New York, New York.

How the Company Makes Money

Stagwell makes money primarily by delivering marketing and communications services to client organizations and billing for those services through its agency network. Its revenue model is largely services-based and typically includes: (1) Fees for professional services and retainers: recurring or project-based fees for strategic marketing consulting, creative development, campaign planning, brand strategy, and ongoing agency-of-record support. (2) Performance and digital marketing services: revenue from planning and executing digital campaigns (e.g., paid media, optimization, and analytics), where compensation is commonly structured as service fees and may include performance-related components depending on contract terms; specific performance-fee details are null if not disclosed. (3) Production and experiential/event services: project fees for producing content and marketing assets and for supporting brand experiences and events when applicable. (4) Public relations and communications: retainer and project fees for earned media strategy, corporate communications, and reputation management services. (5) Research and analytics/insights: fees for market research, measurement, and analytics offerings delivered by its insights-oriented businesses. Across these streams, earnings are influenced by client marketing spend levels, the mix of higher-margin advisory/creative work versus pass-through media or production costs, client retention and new-business wins, and the ability to cross-sell services across its portfolio of agencies. Material, specific strategic partnerships contributing to earnings are null if not publicly detailed.

Stagwell Financial Statement Overview

Summary

Strong TTM revenue growth and solid free cash flow are positives, but overall quality is held back by very thin net profitability and a leveraged balance sheet (elevated debt-to-equity and modest operating cash flow coverage of debt).

Income Statement

TTM (Trailing-Twelve-Months) revenue is up strongly (+64.8%), showing solid top-line momentum, and gross margin has stayed relatively steady in the mid-30% range. However, profitability is thin: TTM net margin is ~0.7% and EBIT margin is ~5.0%, with net income still modest despite the revenue rebound. EBITDA margin remains decent (~12–16% historically), but the gap between EBITDA and bottom-line results suggests meaningful ongoing below-the-line costs that constrain earnings quality.

Balance Sheet

Leverage is the key constraint. TTM debt-to-equity is elevated (~2.35x), and recent years show very high leverage (2024 at ~5.0x; 2023 at ~4.2x), which reduces financial flexibility. Equity improved materially in TTM versus 2024, which helps, but returns remain low (TTM return on equity ~3.6%), reflecting limited profitability relative to the capital base. Overall, the balance sheet looks workable but still meaningfully levered for an advertising services profile.

Cash Flow

Cash generation is a relative bright spot. TTM operating cash flow ($361M) and free cash flow ($306M) are strong and improved sharply versus 2024, with very large free-cash-flow growth. Free cash flow is also sizable relative to reported net income in TTM, implying earnings are currently less robust than cash generation. The main watch item is that operating cash flow covers only a modest portion of total debt (TTM ~0.18), so deleveraging would likely require multiple years of sustained cash production.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.91B	2.84B	2.53B	2.69B	1.47B
Gross Profit	1.06B	998.24M	906.00M	1.01B	562.51M
EBITDA	398.21M	356.81M	401.20M	360.29M	227.94M
Net Income	29.10M	2.26M	134.00K	19.92M	21.04M
Balance Sheet
Total Assets	4.21B	3.91B	3.77B	4.00B	4.06B
Cash, Cash Equivalents and Short-Term Investments	104.54M	131.34M	119.74M	220.59M	184.01M
Total Debt	1.61B	1.66B	1.49B	1.56B	1.61B
Total Liabilities	3.41B	3.12B	2.93B	3.03B	3.13B
Stockholders Equity	776.37M	331.73M	356.69M	498.65M	370.75M
Cash Flow
Free Cash Flow	247.29M	88.85M	38.59M	312.15M	178.23M
Operating Cash Flow	291.03M	142.86M	81.01M	347.59M	200.86M
Investing Cash Flow	-113.68M	-162.47M	155.95M	-116.28M	163.95M
Financing Cash Flow	-210.02M	36.94M	-339.86M	-186.74M	-273.41M

Stagwell Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6.08
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STGW, the sentiment is Positive. The current price of 6.08 is above the 20-day moving average (MA) of 5.46, above the 50-day MA of 5.56, and above the 200-day MA of 5.26, indicating a bullish trend. The MACD of 0.26 indicates Negative momentum. The RSI at 62.23 is Neutral, neither overbought nor oversold. The STOCH value of 64.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for STGW.

Stagwell Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CRTO	67 Neutral	$869.58M	5.65	13.04%	―	0.32%	69.78%
OMC	65 Neutral	$23.29B	―	-0.85%	3.68%	4.13%	-7.84%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
STGW	57 Neutral	$1.54B	37.07	4.42%	―	6.76%	1841.46%
WPP	49 Neutral	$3.27B	-16.67	-7.54%	9.15%	-1.89%	90.72%

Stagwell Corporate Events

Stagwell Expands Stock Buyback Amid AI-Driven Growth

Stagwell Inc., the global marketing network focused on creative performance, digital transformation and technology-led advertising solutions, reported that for the year ended Dec. 31, 2025, revenue rose 2% to $2.91 billion and net revenue increased 6% to $2.43 billion. The company’s marketing cloud was a standout, delivering 230% year-on-year net revenue growth as Stagwell accelerated its strategic pivot toward AI-driven applications and services.

For 2025, net income attributable to common shareholders climbed to $29 million from $2 million a year earlier, while adjusted EBITDA edged up to $422 million and free cash flow more than doubled to $187 million, supported by a $148 million increase in operating cash flow. Stagwell also reported $476 million in net new business over the last 12 months and, on March 4, 2026, its board expanded the stock repurchase program by $350 million to a total capacity of $725 million, leaving about $400 million available and underscoring management’s confidence in the company’s positioning heading into 2026.

The most recent analyst rating on (STGW) stock is a Buy with a $7.00 price target. To see the full list of analyst forecasts on Stagwell stock, see the STGW Stock Forecast page.

Stagwell expands digital advertising via stock-funded asset acquisition

On January 30, 2026, Stagwell Inc. completed an asset purchase of a digital advertising company, paying $5.625 million of the closing consideration through the issuance of 863,624 shares of its Class A common stock. The deal structure includes two additional contingent payments tied to the acquired business’s financial performance over two separate two-year periods beginning January 31, 2026 and January 31, 2028, with Stagwell retaining the option to satisfy up to $5.375 million of the first earn-out and up to $7.0 million of the second in stock, allowing the company to expand its digital advertising capabilities without immediate cash outlay and aligning the sellers’ incentives with future performance.

The most recent analyst rating on (STGW) stock is a Hold with a $7.00 price target. To see the full list of analyst forecasts on Stagwell stock, see the STGW Stock Forecast page.