Stagwell (STGW) AI Stock Analysis

• Market Cap: $1.22B
• Dividend Yield: N/A
• Average Volume (3M): 1.81M
• Price to Earnings (P/E): 896.1
• Beta (1Y): 1.55
• 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: 1,630,535
• 30 Day Avg. Volume: 1,808,019
• 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: 1.80
• Enterprise Value/Revenue: 0.20
• Enterprise Value/Gross Profit: 2.26
• Enterprise Value/Ebitda: 1.65
• 1Y Price Target: $8.09
• Price Target Upside: 77.02% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 66 Neutral
• Price Target: $4.50 ▼(-1.53%Downside)

The overall score for Stagwell is primarily driven by strong financial performance and strategic growth initiatives, particularly in AI and digital transformation. However, significant challenges in valuation and technical indicators weigh down the score. High financial leverage and profitability concerns also pose risks, though strong cash flow provides some mitigation.

Positive Factors

New Business Wins

STGW announced a record $130mm in Q1 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.

Valuation Upside

The target valuation for STGW suggests a potential upside of over 50% if execution meets expectations.

Negative Factors

Forecasting Difficulties

Segment revenue reclassifications without respective quarterly historicals make new segment comprehension and forecasting unfeasible.

Macro Environment Challenges

Inconsistent free cash flow growth is observed in a weakening macro environment.

Media Revenue Slowdown

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

Stagwell Business Overview & Revenue Model

Company Description

Stagwell (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 Money

Stagwell 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 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
EBITDA	38.28M	281.69M	324.54M	282.92M	168.96M	124.59M
Net Income	-81.87M	2.26M	134.00K	65.92M	36.16M	56.36M
Balance Sheet
Total Assets	1.01B	3.91B	3.77B	3.99B	4.08B	1.01B
Cash, Cash Equivalents and Short-Term Investments	91.96M	131.34M	119.74M	220.59M	184.01M	91.96M
Total Debt	271.20M	1.66B	1.49B	1.56B	1.60B	271.20M
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: 4.57
• 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 4.57 is above the 20-day moving average (MA) of 4.50, below the 50-day MA of 4.92, and below the 200-day MA of 6.20, indicating a neutral trend. The MACD of -0.10 indicates Negative momentum. The RSI at 48.28 is Neutral, neither overbought nor oversold. The STOCH value of 72.76 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
OMC	79 Outperform	$14.40B	10.10	36.50%	3.89%	5.84%	-1.17%
WPP	71 Outperform	$7.71B	11.16	16.04%	5.32%	2.07%	407.27%
ZD	71 Outperform	$1.34B	20.35	4.12%	―	3.24%	36.80%
CRTO	71 Outperform	$1.30B	9.90	13.46%	―	-1.18%	100.33%
IPG	71 Outperform	$9.29B	19.21	13.33%	5.39%	-3.18%	-53.36%
Sector *	66 Neutral	¥377.84B	13.80	2.32%	2.49%	5.41%	-19.08%
STGW	66 Neutral	$1.22B	896.08	0.19%	―	9.86%	―

Stagwell Corporate Events

Stagwell Approves Stock Incentive Plan at Annual Meeting

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.

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.