WPP (WPP) AI Stock Analysis

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WPP

(NYSE:WPP)

Rating:66Neutral

Price Target:

$32.00

▲(30.35% Upside)

WPP's overall stock score reflects improved financial performance and attractive valuation, tempered by bearish technical signals and cautious guidance. The company's strong cash flow and strategic focus on AI and data offer potential for long-term growth, but current macroeconomic challenges and high leverage pose risks.

WPP (WPP) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$5.29B

Dividend Yield9.77%

Average Volume (3M)565.02K

Price to Earnings (P/E)10.8

Beta (1Y)0.86

Revenue Growth-1.89%

EPS Growth90.72%

CountryUS

Employees108,044

SectorCommunication Services

Sector Strength93

IndustryAdvertising Agencies

Share Statistics

EPS (TTM)1.34

Shares Outstanding215,760,470

10 Day Avg. Volume479,604

30 Day Avg. Volume565,017

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)0.00

Price to Sales (P/S)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap2.89

Enterprise Value/Revenue1.04

Enterprise Value/Gross Profit6.23

Enterprise Value/Ebitda9.63

Forecast

1Y Price Target

$34.50

Price Target Upside40.53% Upside

Rating ConsensusModerate Sell

Number of Analyst Covering3

WPP Business Overview & Revenue Model

Company DescriptionWPP is a leading global communications services group that provides marketing, advertising, media, and public relations services. Founded in 1985 and headquartered in London, WPP operates through a network of agencies and subsidiaries across various sectors, including digital marketing, brand strategy, creative development, and data analytics. The company serves a diverse range of clients, from multinational corporations to local businesses, offering integrated solutions to enhance brand visibility and engagement in an ever-evolving digital landscape.

How the Company Makes MoneyWPP generates revenue primarily through its extensive portfolio of marketing and advertising services. The company's revenue model is based on a mix of fee-based and commission-based income, derived from agency services such as creative development, media planning and buying, branding, and public relations. Key revenue streams include fees for project-based work, retainers for ongoing services, and commissions from media placements. Additionally, WPP benefits from significant partnerships with major brands and corporations, allowing it to secure long-term contracts and repeat business. The company's investment in data analytics and technology also contributes to its revenue by enabling more effective marketing strategies for clients, thereby increasing client spend and retention.

WPP Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Shows how revenue is distributed across different business segments, highlighting which areas are driving growth and which might need strategic adjustments.

Chart InsightsWPP's Global Integrated Agencies segment shows a stable recovery post-2020, maintaining strong revenue levels despite slight fluctuations. Public Relations experienced a peak in 2022 but has seen a decline since, indicating potential challenges in maintaining growth. Specialist Agencies have stabilized after a significant drop in 2021, suggesting a strategic refocus. The absence of Data Investment Management revenue highlights a potential gap or strategic shift. Overall, WPP's revenue streams show resilience, but the company may need to address the declining momentum in Public Relations to sustain growth.

Data provided by:

Main Street Data

WPP Earnings Call Summary

Earnings Call Date:Aug 07, 2025

(Q4-2024)

% Change Since: -8.36%|

Next Earnings Date:Feb 19, 2026

Earnings Call Sentiment Neutral

The earnings call highlighted improvements in operating margin, debt reduction, and strategic transformation progress. However, it also acknowledged challenges in net revenue decline, significant issues in the China market, and increased finance costs. The cautious guidance for 2025 reflects ongoing uncertainty in macroeconomic conditions.

Q4-2024 Updates

Positive Updates

Operating Margin Improvement

Headline operating margin improved to 15%, up 40 basis points year-on-year, benefiting from structural cost savings and disciplined cost management.

Debt Reduction

Year-end net debt was reduced to GBP 1.7 billion, a GBP 0.8 billion reduction year-on-year, aided by strong working capital management and the sale of FGS Global.

Strategic Transformation Progress

Significant progress in strategic transformation, including network consolidation, simplification, and investment in WPP Open, AI, and data.

Top Client Growth

Top 10 clients grew by 2.8%, and the top 25 clients grew by 2%, indicating solid client relationship management and growth.

AI and Technology Investment

Increased investment in AI and technology, with WPP Open seeing greater adoption and a planned GBP 50 million incremental cash spend in 2025.

Negative Updates

Net Revenue Decline

Net revenue growth was at minus 1%, at the lower end of the guidance range, impacted by challenging trends in China and weaker discretionary spend.

China Market Challenges

China experienced a 20.8% decline in 2024, with persistent macroeconomic pressures and client assignment losses.

Public Relations and Creative Agencies Decline

Public Relations like-for-like declined by 1.7% and creative agencies saw a 3.9% decline, affected by client assignment losses and challenging environments.

Tech and Interest Cost Increases

Net finance costs increased to GBP 280 million due to higher interest rates from bond refinancing.

Cautious 2025 Guidance

Guidance for 2025 is flat to minus 2% like-for-like, reflecting macroeconomic uncertainty and the impact of net new business.

Company Guidance

In the call, WPP provided guidance for fiscal year 2025 with several key financial metrics and strategic priorities highlighted. The company reported a net revenue decline of 1% for 2024, attributing this to challenges such as an 80 basis point drag from China and reduced discretionary spend in the fourth quarter. Despite these headwinds, they improved their headline operating margin by 40 basis points to 15% and achieved an operating cash flow conversion of 86%. Net debt was reduced by GBP 0.8 billion, ending 2024 at GBP 1.7 billion. For 2025, WPP is guiding to a like-for-like revenue range of flat to minus 2%, with expectations of maintaining flat margins despite a challenging macro environment. The company plans to invest GBP 50 million incrementally in AI and data through WPP Open, aiming to leverage AI for creative and media efficiencies. Additionally, they highlighted recent new business wins and improvements in client retention as pivotal for future growth, while also emphasizing the strategic focus on delivering integrated services and facilitating marketing transformations for clients.

WPP Financial Statement Overview

Summary

WPP's financial performance shows improved profitability and strong cash flow generation, despite a slight decline in revenue. Operational efficiency improved with better margins, but high leverage remains a concern. Strong cash flow provides a cushion for future stability.

Income Statement

Positive

The income statement shows a mixed performance. The gross profit margin for 2024 was 16.63%, indicating a solid ability to cover production costs. The net profit margin improved to 3.68% from 0.74% in 2023, showing enhanced profitability. However, the revenue growth rate was -0.70%, indicating a slight decline in total revenue relative to the previous year. EBIT margin improved significantly to 8.99% from 3.58% in 2023, suggesting better operational efficiency. EBITDA margin decreased slightly to 10.76% from 12.86% in 2023.

Balance Sheet

Positive

The balance sheet highlights some strengths and challenges. The debt-to-equity ratio increased to 1.83 from 2.04 in 2023, suggesting a high level of leverage, which can be risky. Return on equity (ROE) improved to 15.60% from 3.27% in 2023, indicating better profitability for shareholders. The equity ratio stands at 13.62%, slightly better than the previous year, but still suggests heavy reliance on debt financing.

Cash Flow

Positive

Cash flow statements reveal strong free cash flow growth of 19.41%, indicating improved cash generation capabilities. The operating cash flow to net income ratio was 2.60, demonstrating robust operating cash flow relative to net income. The free cash flow to net income ratio was 2.25, further emphasizing strong cash flow performance compared to earnings.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	14.74B	14.84B	14.43B	12.80B	12.00B
Gross Profit	2.45B	2.52B	2.54B	2.20B	2.01B
EBITDA	1.59B	1.91B	2.03B	1.78B	-1.85B
Net Income	542.00M	110.40M	682.70M	637.70M	-2.97B
Balance Sheet
Total Assets	25.51B	26.62B	28.82B	27.87B	36.17B
Cash, Cash Equivalents and Short-Term Investments	2.64B	2.22B	2.49B	3.88B	12.90B
Total Debt	6.35B	6.88B	7.18B	6.83B	15.75B
Total Liabilities	21.77B	22.79B	24.66B	23.80B	31.12B
Stockholders Equity	3.48B	3.38B	3.68B	3.62B	4.73B
Cash Flow
Free Cash Flow	1.22B	1.02B	477.60M	1.74B	1.78B
Operating Cash Flow	1.41B	1.24B	700.90M	2.03B	2.05B
Investing Cash Flow	278.00M	-380.40M	-408.90M	-638.40M	-163.40M
Financing Cash Flow	-989.00M	-904.70M	-1.91B	-2.06B	-250.50M

WPP Technical Analysis

Technical Analysis Sentiment

Negative

Last Price24.55

Price Trends

50DMA

31.90

Negative

100DMA

34.27

Negative

200DMA

40.82

Negative

Market Momentum

MACD

-1.90

Positive

RSI

20.50

Positive

STOCH

7.27

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WPP, the sentiment is Negative. The current price of 24.55 is below the 20-day moving average (MA) of 27.27, below the 50-day MA of 31.90, and below the 200-day MA of 40.82, indicating a bearish trend. The MACD of -1.90 indicates Positive momentum. The RSI at 20.50 is Positive, neither overbought nor oversold. The STOCH value of 7.27 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WPP.

WPP Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OMC	76 Outperform	$14.13B	10.46	33.96%	3.84%	5.21%	-3.74%
ZD	74 Outperform	$1.41B	23.65	3.56%	―	5.94%	-8.89%
CRTO	73 Outperform	$1.35B	9.75	12.79%	―	-0.40%	36.44%
STGW	71 Outperform	$1.41B	490.99	-0.32%	―	9.56%	―
IPG	70 Outperform	$9.15B	21.15	11.70%	5.29%	-5.16%	-56.06%
WPP	66 Neutral	$5.29B	10.81	11.24%	9.77%	-1.89%	90.72%
Sector *	60 Neutral	$43.99B	4.18	-7.47%	4.06%	2.47%	-40.32%

* Communication Services Sector Average

Performance Comparison

WPP

24.55

-17.02

-40.94%

IPG

Interpublic Group of Companies

25.27

-4.01

-13.70%

Ziff Davis

34.67

-7.71

-18.19%

STGW

Stagwell

5.54

-0.92

-14.24%

OMC

Omnicom Group

73.68

-17.68

-19.35%

CRTO

Criteo SA

23.68

-24.08

-50.42%

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 10, 2025