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Stagwell Inc. (STGW)
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Stagwell (STGW) AI Stock Analysis

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STGW

Stagwell

(NASDAQ:STGW)

Rating:71Outperform
Price Target:
$5.50
▲(13.40%Upside)
Stagwell's overall score is positively influenced by strong earnings call results and strategic corporate events, highlighting growth potential. However, the high P/E ratio and significant financial leverage remain concerns. The technical outlook is cautiously optimistic, but approaching overbought conditions suggest monitoring.
Positive Factors
New Business
STGW announced a record $130mm in new business, including high-profile clients like PayPal, Panera, and GM, indicating a strong pipeline.
Partnerships
Adobe's partnership with STGW began and the full impact is expected to positively influence the company's performance.
Revenue Growth
Stagwell Marketing Cloud revenues rose 45% year-over-year, excluding Advocacy, showcasing robust growth performance.
Negative Factors
Ad Spend Trends
Rising caution tied to the macro environment suggests a risk of a pull-back in marketing budgets and broader near-term ad spend trends.
Earnings Forecast
Reduced estimates reflect macro uncertainties affecting earnings forecasts, presenting challenges for future performance.
Media Revenue
There were uncertainties affecting stock performance, including a slowdown in media revenue due to a single client.

Stagwell (STGW) vs. SPDR S&P 500 ETF (SPY)

Stagwell Business Overview & Revenue Model

Company DescriptionStagwell (STGW) is a digital-first marketing agency network that operates in the advertising and media industry. The company focuses on leveraging technology and data-driven insights to provide integrated marketing solutions. Stagwell offers a range of services, including digital marketing, content creation, market research, and media buying, catering to a wide array of industries globally.
How the Company Makes MoneyStagwell generates revenue primarily through service fees for its diverse portfolio of marketing services. The company earns money by creating and executing marketing strategies for clients, which can include digital advertising campaigns, media planning, and content creation. Additionally, Stagwell benefits from long-term partnerships and contracts with large corporate clients. The company also leverages data analytics and technology platforms to enhance its offerings, which can result in additional revenue streams from tech-enabled marketing solutions or software services. A significant factor contributing to its earnings is its ability to deliver measurable results, which helps retain clients and attract new business.

Stagwell Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q1-2025)
|
% Change Since: -16.52%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call for Stagwell Inc. was largely positive, with strong revenue growth, record net new business, and successful client expansions and acquisitions. Despite a decline in the Performance Media and Data segment, the company's innovations in AI and technology and industry recognition bolster confidence in future performance.
Q1-2025 Updates
Positive Updates
Strong Net Revenue Growth
Stagwell delivered a 9% total net revenue growth, excluding Advocacy, in the first quarter. Digital Transformation saw a 15% net revenue growth, and the Stagwell Marketing Cloud achieved a 45% growth.
Record Net New Business
Stagwell reported $130 million in net new business for the quarter, nearly doubling from a year ago. This includes key wins with major clients such as PayPal, Panera, CarMax, Celsius, and Hyatt.
Impressive Client Expansion
Strong growth in technology and retail sectors, with technology clients increasing spend by 18% and retail clients by 52%.
Successful Acquisitions
Acquisitions such as JetFuel and UNICEPTA are performing well, contributing to market expansion in regions like the Middle East where net revenue grew by more than 250% year-over-year.
Innovations in AI and Technology
Stagwell is investing in AI developments and new tool integrations like the Stagwell ID graph and partnerships with Palantir and Adobe to enhance their offerings.
Awards and Industry Recognition
Stagwell agencies received accolades at the Webby Awards and the 2025 Ad Age Award, highlighting their creative and digital innovation capabilities.
Negative Updates
Performance Media and Data Decline
Performance Media and Data reported a 10% decline in net revenue in the first quarter, impacted by reduced spend from a key client in its strongest seasonal quarter.
Tariff Concerns
Minimal direct impact was felt from tariffs, but there is ongoing monitoring of developments which could potentially affect future performance.
Company Guidance
In the recent earnings call for Stagwell Inc.'s first quarter of 2025, the company demonstrated robust financial performance and strategic growth initiatives. Stagwell reported a 6% increase in net revenue to $564 million, with an adjusted EBITDA of $81 million, reflecting a margin of 14.3%. Excluding Advocacy, net revenue growth was 9%, driven by strong performances across various capabilities, including a 15% increase in Digital Transformation and a 45% surge in the Stagwell Marketing Cloud. Stagwell achieved significant new business wins totaling $130 million for the quarter, nearly doubling from the previous year, with substantial contributions from technology and retail sectors. The company also highlighted an $81 million investment in tech initiatives, while maintaining a comp to net revenue ratio of 65.3%, showing an improvement of 175 basis points from 2023. Stagwell anticipates $60 million to $70 million in cost savings this year, underscoring their commitment to efficiency and innovation, particularly in AI and digital transformation.

Stagwell Financial Statement Overview

Summary
Stagwell exhibits strong revenue growth and effective operational management, as evidenced by solid gross profit margins and stable EBIT/EBITDA performance. However, profitability challenges persist with low net profit margins and return on equity. High financial leverage poses risks, albeit buffered by strong cash flow generation.
Income Statement
75
Positive
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
68
Positive
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
70
Positive
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.84B2.53B2.69B1.47B888.03M
Gross Profit998.24M906.00M1.01B562.51M316.44M
EBITDA281.69M324.54M282.92M168.96M124.59M
Net Income2.26M134.00K65.92M36.16M56.36M
Balance Sheet
Total Assets3.91B3.77B3.99B4.08B1.01B
Cash, Cash Equivalents and Short-Term Investments131.34M119.74M220.59M184.01M91.96M
Total Debt1.66B1.49B1.56B1.60B271.20M
Total Liabilities3.12B2.93B3.01B3.13B615.31M
Stockholders Equity331.73M356.69M482.54M381.62M358.76M
Cash Flow
Free Cash Flow88.85M38.59M306.78M147.95M124.09M
Operating Cash Flow142.86M81.01M348.82M170.57M138.08M
Investing Cash Flow-162.47M155.95M-117.51M141.81M-29.02M
Financing Cash Flow36.94M-339.86M-186.74M-273.41M-80.14M

Stagwell Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price4.85
Price Trends
50DMA
4.70
Positive
100DMA
5.25
Negative
200DMA
6.06
Negative
Market Momentum
MACD
0.06
Negative
RSI
55.86
Neutral
STOCH
70.16
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 4.85 is above the 20-day moving average (MA) of 4.63, above the 50-day MA of 4.70, and below the 200-day MA of 6.06, indicating a neutral trend. The MACD of 0.06 indicates Negative momentum. The RSI at 55.86 is Neutral, neither overbought nor oversold. The STOCH value of 70.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$13.77B10.1933.96%4.97%5.21%-3.74%
71
Outperform
$1.32B950.980.19%9.86%
70
Outperform
$1.23B9.5213.46%-1.18%100.33%
69
Neutral
$8.94B18.4813.33%6.87%-3.18%-53.36%
68
Neutral
$1.28B18.964.12%3.24%36.80%
66
Neutral
$6.09B8.6616.04%0.18%2.07%407.27%
62
Neutral
$41.14B-1.89-12.05%3.52%2.11%-69.63%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
STGW
Stagwell
5.05
-1.74
-25.63%
IPG
Interpublic Group of Companies
25.69
-2.52
-8.93%
ZD
Ziff Davis
31.81
-16.92
-34.72%
OMC
Omnicom Group
75.21
-12.61
-14.36%
WPP
WPP
28.82
-16.19
-35.97%
CRTO
Criteo SA
23.21
-21.74
-48.36%

Stagwell Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Stagwell Appoints New CFO Amid Leadership Restructuring
Positive
Jul 8, 2025

On July 2, 2025, Stagwell appointed Ryan Greene as Chief Financial Officer, transitioning from his previous role as Chief Operating Officer, and Frank Lanuto as Executive Vice President, Finance, moving from his position as Chief Financial Officer. These leadership changes are part of Stagwell’s strategic efforts to enhance its executive team and achieve its ambitious 5×5 plan, aiming for $5 billion in revenue over the next five years. The company also announced the elimination of the Chief Accounting Officer role, with Vincenzo DiMaggio set to depart, and the appointment of Jason Reid as Chief Strategy Officer and Niels Laurberg as Chief Investment Officer, further strengthening its leadership to tackle industry challenges and drive growth.

The most recent analyst rating on (STGW) stock is a Buy with a $8.00 price target. To see the full list of analyst forecasts on Stagwell stock, see the STGW Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Stagwell Approves Stock Incentive Plan at Annual Meeting
Neutral
Jun 17, 2025

On June 12, 2025, Stagwell Inc. held its Annual Meeting of Stockholders where the stockholders approved the Third Amended and Restated 2016 Stock Incentive Plan, increasing the number of Class A common stock shares reserved for issuance by 20 million. Additionally, the stockholders elected directors, approved executive compensation, and ratified the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025.

The most recent analyst rating on (STGW) stock is a Buy with a $8.00 price target. To see the full list of analyst forecasts on Stagwell stock, see the STGW Stock Forecast page.

M&A TransactionsBusiness Operations and Strategy
Stagwell Acquires Experiential Marketing Company for $11.3M
Positive
May 6, 2025

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.

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.Date of analysis: Jul 18, 2025