Stagwell (STGW) AI Stock Analysis

• Market Cap: $1.28B
• Dividend Yield: N/A
• Average Volume (3M): 1.55M
• Price to Earnings (P/E): 939.2
• Beta (1Y): 1.56
• Revenue Growth: 9.86%
• EPS Growth: N/A
• Country: US
• Employees: 11,857
• Sector: Communication Services
• Sector Strength: 90
• Industry: Advertising Agencies
• EPS (TTM): 0.12
• Shares Outstanding: 267,682,740
• 10 Day Avg. Volume: 2,431,186
• 30 Day Avg. Volume: 1,551,662
• PEG Ratio: >-0.01
• Price to Book (P/B): 0.51
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 1.49
• Enterprise Value/Market Cap: 1.71
• Enterprise Value/Revenue: 0.20
• Enterprise Value/Gross Profit: 2.26
• Enterprise Value/Ebitda: 1.65
• 1Y Price Target: $8.09
• Price Target Upside: 61.80% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 70 Outperform
• Price Target: $5.50 ▲(10.00%Upside)

Stagwell's overall score reflects strong revenue growth and strategic initiatives in AI and digital transformation. However, high financial leverage and an extremely high P/E ratio are significant concerns. The recent earnings call and corporate events bolster confidence, but valuation issues and technical indicators suggest caution.

Positive Factors

New Business Wins

STGW announced a record $130mm in new business, including high-profile clients like PayPal, Panera, and GM.

Revenue Growth Potential

The company's digital transformation and marketing cloud services showed significant growth, highlighting their potential.

Negative Factors

Media Revenue Slowdown

There were uncertainties affecting stock performance, including a slowdown in media revenue due to a single client.

Reduced Revenue Growth Visibility

The removal of quarterly organic net revenue growth disclosure limits the ability to track progression, suggesting reliance on M&A to achieve targets.

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 through its suite of marketing and communication services, which are offered to a wide range of clients across different industries. The company's revenue streams include fees for strategic consulting, creative services, and media planning and buying. Stagwell also generates income from its digital transformation services, which help clients leverage technology to improve customer engagement and operational efficiency. Additionally, the company benefits from key partnerships and acquisitions that expand its capabilities and client base, allowing it to offer integrated, data-driven marketing solutions that contribute significantly to its earnings.

Stagwell Financial Statement Overview

Summary

Stagwell shows strong revenue growth and effective operational management, as evidenced by solid gross profit margins and stable EBIT/EBITDA performance. However, profitability remains a concern with low net profit margins and return on equity. The company's financial leverage is high, which could introduce risk, but strong cash flow generation provides a buffer. Overall, while there are challenges, particularly in profitability and leverage, the company maintains a positive growth trajectory and solid cash flow management.

Income Statement

Stagwell demonstrates solid gross profit margins at approximately 34.4% TTM, indicating effective cost management. However, the net profit margin is low at 0.02% TTM, showing profitability challenges. Revenue growth TTM is positive, marking a 11.7% increase from the previous year, which is a strong indicator of business expansion. EBIT and EBITDA margins show consistent performance, suggesting stable operational efficiency.

Balance Sheet

The debt-to-equity ratio is relatively high at 5.22 TTM, indicating significant leverage which could pose risks if not managed properly. The return on equity is notably low at 0.19% TTM, reflecting weak profitability for shareholders. The equity ratio stands at 8.4% TTM, highlighting a low equity base compared to total assets, suggesting potential vulnerability in financial structure.

Cash Flow

The free cash flow growth rate is positive at 5.5% TTM, indicating improved cash generation. The operating cash flow to net income ratio is notably high at 183.2 TTM, suggesting strong cash conversion capabilities. However, the free cash flow to net income ratio is also significantly high at 150.3 TTM, indicating robust free cash flow relative to earnings.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.35B	2.84B	2.53B	2.69B	1.47B	888.03M
	Gross Profit
447.09M	998.24M	906.00M	1.01B	562.51M	316.44M
	EBIT
50.31M	133.07M	115.13M	274.35M	60.97M	83.74M
	EBITDA
38.28M	281.69M	324.54M	282.92M	168.96M	124.59M
	Net Income Common Stockholders
-81.87M	2.26M	134.00K	65.92M	36.16M	56.36M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
91.96M	131.34M	119.74M	220.59M	184.01M	91.96M
	Total Assets
1.01B	3.91B	3.77B	3.99B	4.08B	1.01B
	Total Debt
271.20M	1.66B	1.49B	1.56B	1.60B	271.20M
	Net Debt
179.25M	1.53B	1.37B	1.33B	1.41B	179.25M
	Total Liabilities
615.31M	3.12B	2.93B	3.01B	3.13B	615.31M
	Stockholders Equity
358.76M	331.73M	356.69M	482.54M	381.62M	358.76M
Cash Flow		Free Cash Flow
88.74M	88.85M	38.59M	306.78M	147.95M	124.09M
	Operating Cash Flow
114.38M	142.86M	81.01M	348.82M	170.57M	138.08M
	Investing Cash Flow
-18.93M	-162.47M	155.95M	-117.51M	141.81M	-29.02M
	Financing Cash Flow
-93.68M	36.94M	-339.86M	-186.74M	-273.41M	-80.14M

Stagwell Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 5.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Neutral. The current price of 5 is above the 20-day moving average (MA) of 4.76, below the 50-day MA of 5.17, and below the 200-day MA of 6.38, indicating a neutral trend. The MACD of -0.19 indicates Negative momentum. The RSI at 53.38 is Neutral, neither overbought nor oversold. The STOCH value of 79.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for STGW.

Stagwell Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ZD	74 Outperform	$1.44B	21.15	4.12%	―	3.24%	36.80%
WPP	71 Outperform	$8.10B	11.63	16.04%	5.10%	2.07%	407.27%
CRTO	71 Outperform	$1.39B	10.74	13.46%	―	-1.18%	100.33%
STGW	70 Outperform	$1.28B	939.22	0.19%	―	9.86%	―
OMC	69 Neutral	$14.28B	10.02	36.50%	3.82%	5.84%	-1.17%
Sector *	61 Neutral	$14.79B	5.90	-3.99%	6.20%	2.67%	-30.30%
IPG	60 Neutral	$8.79B	18.17	13.33%	5.55%	-3.18%	-53.36%

Stagwell Corporate Events

Stagwell Acquires Experiential Marketing Company for $11.3M

On May 1, 2025, Stagwell Inc. entered into an agreement to acquire all equity interests in an experiential marketing company. The transaction involved issuing 2,017,857 shares of Class A common stock valued at $11.3 million. Stagwell has contingent obligations for additional payments based on the acquiree’s financial performance over two specified periods. The acquisition aims to enhance Stagwell’s market positioning in the experiential marketing sector.

Stagwell Unveils Strategic Plan at Investor Day 2025

On April 2, 2025, Stagwell Inc. held its 2025 Virtual Investor Day, announcing a strategic plan targeting $5 billion in revenue by 2029 and $80 to $100 million in cost savings through AI-driven efficiencies. The company also plans to simplify its capital structure by converting Class C shares to Class A shares, enhancing its appeal to investors. Stagwell’s restructuring aims to align its business units with client needs and improve financial reporting. Additionally, a partnership with Palantir will enhance data capabilities, and the appointment of a Chief AI Officer will spearhead AI integration across the network.