Stagwell (STGW)
NASDAQ:STGW
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Stagwell
(NASDAQ:STGW)
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Rating:55Neutral
Price Target:
$6.50
▼(-10.71% Downside)
Action:Reiterated
Date:05/01/26
The score is driven primarily by middling financial strength: solid free cash flow and improved growth are offset by high leverage and thin net profitability. Earnings-call commentary is a notable positive due to reiterated guidance, margin improvement, and strong new-business momentum, while valuation (high P/E and no dividend) and mixed technical momentum limit upside to the overall score.
Positive Factors
Robust free cash flow generation
Consistent, sizable free cash flow (TTM ~$275M) and a management target of high FCF conversion underpin durable ability to fund buybacks, invest in tech, and pay down debt. Strong cash generation improves financial optionality and supports deleveraging even if revenue growth moderates.
Negative Factors
Elevated leverage versus peers
High leverage constrains financial flexibility and increases refinancing and interest‑rate exposure. Even with improving cash flow, leverage above mid‑2x leaves limited headroom for downside scenarios and makes strategic moves (M&A, cyclical investments) more dependent on continued EBITDA improvement.
Read all positive and negative factors
Positive Factors
Negative Factors
Robust free cash flow generation
Consistent, sizable free cash flow (TTM ~$275M) and a management target of high FCF conversion underpin durable ability to fund buybacks, invest in tech, and pay down debt. Strong cash generation improves financial optionality and supports deleveraging even if revenue growth moderates.
Read all positive factors
Stagwell (STGW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.50B
Dividend YieldN/A
Average Volume (3M)1.75M
Price to Earnings (P/E)―
Beta (1Y)1.07
Revenue Growth4.48%
EPS Growth868.83%
CountryUS
Employees11,857
SectorCommunication Services
Sector Strength97
IndustryAdvertising Agencies
Share Statistics
EPS (TTM)0.08
Shares Outstanding247,854,370
10 Day Avg. Volume1,434,903
30 Day Avg. Volume1,750,828
Financial Highlights & Ratios
PEG Ratio0.07
Price to Book (P/B)1.39
Price to Sales (P/S)0.37
P/FCF Ratio4.36
Enterprise Value/Market Cap2.13
Enterprise Value/Revenue1.08
Enterprise Value/Gross Profit3.12
Enterprise Value/Ebitda9.03
Forecast
1Y Price Target
$7.96Price Target Upside9.32% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)1.05
Revenue Forecast (FY)$3.20B
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 Com...
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 ...
Stagwell Earnings Call Summary
Earnings Call Date:May 01, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 30, 2026
Earnings Call Sentiment Positive
The call was broadly positive: management reported record new business, continued organic growth across all segments, clear momentum in Digital Transformation and early traction for enterprise AI products, plus margin expansion, stronger cash flow and active share repurchases. Challenges remain, including modest net revenue growth in Q1, slower recovery in Media and Marketing Services, regional headwinds (Middle East) and dependence on closing several large deals and the upcoming political cycle to drive acceleration in H2. Deleveraging progress and disciplined cost actions provide confidence, but some guidance upside is contingent on execution of large contract wins and product scaling.Positive Updates
Top-Line Growth
Revenue grew 8% year-over-year to $704 million; net revenue rose ~3.6%-4% to $585 million, with all five segments delivering revenue and net revenue growth in Q1.
Negative Updates
Modest Net Revenue Growth in Q1
Net revenue growth was relatively modest (~3.6%-4% YoY to $585 million) despite stronger headline revenue growth, indicating margin mix and lower net revenue expansion in the quarter.
Read all updates
Q1-2026 Updates
Positive
Negative
Top-Line Growth
Revenue grew 8% year-over-year to $704 million; net revenue rose ~3.6%-4% to $585 million, with all five segments delivering revenue and net revenue growth in Q1.
Read all positive updates
Company Guidance
Stagwell reiterated full‑year guidance calling for total net revenue growth of 8%–12%, adjusted EBITDA of $475M–$525M, adjusted EPS of $0.98–$1.12 and free cash‑flow conversion of 50%–60% of adjusted EBITDA (management is targeting roughly $250M–$300M in free cash flow and expects deferred acquisition consideration to be negligible by year‑end). In Q1 the company delivered revenue of $704M (+8% YoY) and net revenue of ~$585M (≈+4% YoY), adjusted EBITDA of $89.7M (15.3% margin, +9% YoY, +75 bps), adjusted EPS of $0.17 (+31% YoY), operating cash flow up $34M YoY and free cash flow up $18M YoY; payroll as a percent of net revenue declined to 63.9% (-110 bps) and G&A to 19.6% (-50 bps). Other Q1 metrics: Marketing Cloud $26.5M (+5.3%), Digital Transformation net revenue $96.5M (+9%, 2‑year organic stack >22%), Media & Commerce $149.5M (+2.3%), Marketing Services $217.6M (+1.1%), Communications $96.8M (+6.4%); record net new business of $141M in Q1 (LTM $486M); enterprise tech first‑year sales goal $25M with $12M booked; repurchased ~7.3M shares for ~$45M (avg $6.16), shares outstanding ~246M (down ~19M YoY); revolver $350M (down $25M YoY), deferred consideration ~$50M (down ~$43M YoY), capex & capitalized software $33M, and net leverage 3.11x (improved 0.17 turns YoY, target mid‑2s by year‑end).Stagwell Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
38
Negative
Cash Flow
67
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.96B | 2.91B | 2.84B | 2.53B | 2.69B | 1.47B |
| Gross Profit | 1.02B | 1.06B | 998.24M | 906.00M | 1.01B | 562.51M |
| EBITDA | 353.93M | 398.21M | 356.81M | 401.20M | 360.29M | 227.94M |
| Net Income | 19.05M | 29.10M | 2.26M | 134.00K | 19.92M | 21.04M |
Balance Sheet | ||||||
| Total Assets | 4.24B | 4.21B | 3.91B | 3.77B | 4.00B | 4.06B |
| Cash, Cash Equivalents and Short-Term Investments | 114.94M | 104.54M | 131.34M | 119.74M | 220.59M | 184.01M |
| Total Debt | 1.71B | 1.61B | 1.66B | 1.49B | 1.56B | 1.61B |
| Total Liabilities | 3.50B | 3.41B | 3.12B | 2.93B | 3.03B | 3.13B |
| Stockholders Equity | 722.51M | 776.37M | 331.73M | 356.69M | 498.65M | 370.75M |
Cash Flow | ||||||
| Free Cash Flow | 274.51M | 247.29M | 88.85M | 38.59M | 312.15M | 178.23M |
| Operating Cash Flow | 324.70M | 291.03M | 142.86M | 81.01M | 347.59M | 200.86M |
| Investing Cash Flow | -125.35M | -113.68M | -162.47M | 155.95M | -116.28M | 163.95M |
| Financing Cash Flow | -225.03M | -210.02M | 36.94M | -339.86M | -186.74M | -273.41M |
Stagwell Technical Analysis
Positive
7.28
Price Trends
5.72
Positive
5.65
Positive
5.44
Positive
Market Momentum
0.31
Negative
74.60
Negative
89.71
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 7.28 is above the 20-day moving average (MA) of 6.40, above the 50-day MA of 5.72, and above the 200-day MA of 5.44, indicating a bullish trend. The MACD of 0.31 indicates Negative momentum. The RSI at 74.60 is Negative, neither overbought nor oversold. The STOCH value of 89.71 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for STGW.
Stagwell Risk Analysis
Stagwell disclosed 38 risk factors in its most recent earnings report. Stagwell reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Stagwell Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $21.67B | 9.52 | 0.82% | 3.68% | 25.88% | -94.29% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
59 Neutral | $811.59M | 28.87 | 10.24% | ― | -0.43% | -15.84% | |
55 Neutral | $1.50B | -30.40 | 2.52% | ― | 4.48% | 868.83% | |
49 Neutral | $3.79B | -3.46 | -7.54% | 9.15% | -5.19% | -141.67% |
* Communication Services Sector Average
STGW
Stagwell
6.06
0.65
12.01%
OMC
Omnicom Group
76.04
1.54
2.07%
WPP
WPP
17.46
-20.57
-54.09%
CRTO
Criteo SA
16.20
-13.73
-45.87%
Stagwell Corporate Events
Business Operations and StrategyFinancial Disclosures
Stagwell Posts Solid Q1 2026 Growth and Outlook
Positive
Apr 30, 2026
Stagwell Inc. reported first-quarter 2026 results on April 30, 2026, posting revenue of $704 million, up 8% year-on-year, and net revenue of $585 million, up 4% and in line with budget. Digital Transformation net revenue rose 9% to $97 million, co...
Business Operations and StrategyStock BuybackFinancial Disclosures
Stagwell Expands Stock Buyback Amid AI-Driven Growth
Positive
Mar 10, 2026
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 increase...
Business Operations and StrategyM&A Transactions
Stagwell expands digital advertising via stock-funded asset acquisition
Positive
Feb 5, 2026
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...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.