Stagwell (STGW) AI Stock Analysis

• Market Cap: $1.65B
• Dividend Yield: N/A
• Average Volume (3M): 1.52M
• Price to Earnings (P/E): 85.5
• Beta (1Y): 1.15
• Revenue Growth: 6.76%
• EPS Growth: 1841.46%
• Country: US
• Employees: 11,857
• Sector: Communication Services
• Sector Strength: 97
• Industry: Advertising Agencies
• EPS (TTM): 0.24
• Shares Outstanding: 252,118,240
• 10 Day Avg. Volume: 2,164,538
• 30 Day Avg. Volume: 1,515,179
• PEG Ratio: 0.18
• Price to Book (P/B): 2.20
• Price to Sales (P/S): 0.26
• P/FCF Ratio: 8.21
• Enterprise Value/Market Cap: 1.92
• Enterprise Value/Revenue: 1.10
• Enterprise Value/Gross Profit: 3.03
• Enterprise Value/Ebitda: 8.78
• 1Y Price Target: $8.65
• Price Target Upside: 31.86% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): 1.06
• Revenue Forecast (FY): $3.25B

• Rating: 65 Neutral
• Price Target: $7.00 ▲(6.71% Upside)

Stagwell's overall stock score reflects a company with strong growth potential, particularly in digital transformation and AI initiatives, as highlighted in the earnings call. However, high leverage and profitability challenges weigh on its financial performance. The technical analysis indicates positive momentum, but valuation concerns due to a high P/E ratio limit the stock's appeal.

Positive Factors

Strategic Partnership

The partnership with Palantir positions Stagwell at the forefront of AI marketing, potentially unlocking new revenue streams and enhancing competitive edge.

International Expansion

The new APAC headquarters in Singapore will strengthen Stagwell's presence in Asia, facilitating growth and collaboration across the region.

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term financial health.

Negative Factors

High Leverage

High leverage increases financial risk, potentially limiting flexibility and impacting the company's ability to invest in growth initiatives.

Profitability Challenges

Negative profit margins indicate difficulties in operational efficiency, which could hinder long-term profitability and shareholder returns.

Communications Segment Weakness

Weakness in the communications segment due to industry headwinds could affect overall growth and require strategic adjustments.

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 generates revenue primarily through its diversified services in marketing and communications. Key revenue streams include fees for advertising and media services, public relations services, and digital marketing solutions. The company operates through a portfolio of agencies and brands, allowing it to serve a wide range of clients, from large enterprises to smaller businesses. Stagwell also benefits from strategic partnerships that enhance its service offerings and expand its market reach, contributing significantly to its earnings. Additionally, the company capitalizes on the growing demand for digital transformation, utilizing data analytics to optimize marketing campaigns and improve ROI for its clients.

Stagwell Financial Statement Overview

Summary

Stagwell's financial statements reflect moderate revenue growth but face profitability and leverage challenges. The income statement shows a positive revenue trend, but profitability needs improvement. The balance sheet indicates high leverage, posing risks if not managed carefully. Cash flow is stable but shows signs of strain, requiring attention to sustain growth.

Income Statement

Stagwell's income statement shows moderate growth and profitability. The TTM revenue growth rate is positive at 1.11%, indicating a slight upward trend. However, the net profit margin is negative, suggesting challenges in converting revenue into profit. The gross profit margin is stable at around 35.95%, and the EBIT and EBITDA margins are reasonable, reflecting operational efficiency. Overall, the company demonstrates growth potential but faces profitability challenges.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 2.34 in the TTM, indicating significant leverage. This poses a risk if revenue growth does not keep pace with debt obligations. The return on equity is negative, reflecting challenges in generating returns for shareholders. However, the equity ratio is stable, suggesting a balanced asset structure. The company needs to manage its leverage to improve financial stability.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth at -11.97% in the TTM, indicating potential liquidity issues. However, the operating cash flow to net income ratio is positive, suggesting that operational activities are generating cash. The free cash flow to net income ratio is strong at 1.00, indicating efficient cash conversion. Overall, cash flow management is adequate but requires attention to sustain growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.89B	2.84B	2.53B	2.69B	1.47B	888.03M
Gross Profit	1.05B	998.24M	906.00M	1.01B	562.51M	316.44M
EBITDA	360.98M	356.81M	401.20M	360.29M	227.94M	124.59M
Net Income	19.68M	2.26M	134.00K	19.92M	21.04M	56.36M
Balance Sheet
Total Assets	4.26B	3.91B	3.77B	4.00B	4.06B	1.01B
Cash, Cash Equivalents and Short-Term Investments	132.24M	131.34M	119.74M	220.59M	184.01M	92.46M
Total Debt	1.81B	1.66B	1.49B	1.56B	1.61B	271.20M
Total Liabilities	3.48B	3.12B	2.93B	3.03B	3.13B	614.71M
Stockholders Equity	770.48M	331.73M	356.69M	498.65M	370.75M	358.76M
Cash Flow
Free Cash Flow	202.31M	88.85M	38.59M	312.15M	178.23M	123.79M
Operating Cash Flow	242.80M	142.86M	81.01M	347.59M	200.86M	138.08M
Investing Cash Flow	-176.75M	-162.47M	155.95M	-116.28M	163.95M	-29.02M
Financing Cash Flow	-77.97M	36.94M	-339.86M	-186.74M	-273.41M	-80.14M

Stagwell Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6.56
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 6.56 is above the 20-day moving average (MA) of 5.22, above the 50-day MA of 5.28, and above the 200-day MA of 5.19, indicating a bullish trend. The MACD of 0.18 indicates Negative momentum. The RSI at 75.65 is Negative, neither overbought nor oversold. The STOCH value of 94.03 is Negative, 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	76 Outperform	$1.02B	6.54	15.37%	―	0.32%	69.78%
OMC	73 Outperform	$25.10B	11.78	31.17%	3.68%	4.13%	-7.84%
STGW	65 Neutral	$1.65B	85.53	3.80%	―	6.76%	1841.46%
WPP	64 Neutral	$4.56B	9.30	11.24%	9.15%	-1.89%	90.72%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%

Stagwell Corporate Events

Stagwell Reports Strong Q3 2025 Financial Performance

Stagwell Inc. reported a 4% year-over-year revenue growth and a 6% increase in net revenue for the third quarter of 2025, with notable growth in digital transformation and marketing services. The company achieved a net income of $25 million and an adjusted EBITDA of $115 million, reflecting strong financial performance despite a cyclical advocacy pullback. Stagwell’s partnership with Palantir highlights its leadership in AI marketing applications, and the company is focused on cost efficiency and labor management, resulting in a 19% adjusted EBITDA margin. The financial outlook for 2025 includes a projected total net revenue growth of approximately 8% and an adjusted EBITDA between $410 million and $460 million.

The most recent analyst rating on (STGW) stock is a Buy with a $6.36 price target. To see the full list of analyst forecasts on Stagwell stock, see the STGW Stock Forecast page.