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Stagwell
(NASDAQ:STGW)
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Rating:58Neutral
Price Target:
$9.00
▲(4.17% Upside)
Action:Reiterated
Date:10/29/26
The score is driven by strong cash generation and a positive earnings narrative (raised EPS guidance, margin expansion, record net new business), partially offset by thin net profitability and balance-sheet leverage risk. Technicals are moderately supportive with price above major moving averages, while valuation is the main drag due to a very high P/E and no dividend yield provided.
Positive Factors
Digital transformation growth
Digital Transformation is showing sustained, high-growth demand and strong profitability, making it more than a cyclical agency offering. Continued expansion in this segment can improve Stagwell’s mix, support margin durability, and strengthen its position as marketing shifts toward technology-enabled services.
Negative Factors
Elevated leverage
Leverage remains a meaningful constraint even after improving from prior levels. Elevated debt relative to equity increases sensitivity to weaker earnings or cash flow, can restrict investment and acquisition flexibility, and leaves less financial capacity to absorb operating volatility over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Digital transformation growth
Digital Transformation is showing sustained, high-growth demand and strong profitability, making it more than a cyclical agency offering. Continued expansion in this segment can improve Stagwell’s mix, support margin durability, and strengthen its position as marketing shifts toward technology-enabled services.
Read all positive factors
Stagwell (STGW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.16B
Dividend Yield6.16%
Average Volume (3M)1.52M
Price to Earnings (P/E)136.3
Beta (1Y)1.09
Revenue Growth6.17%
EPS Growth351.09%
CountryUS
Employees10,951
SectorCommunication Services
Sector Strength97
IndustryAdvertising Agencies
Share Statistics
EPS (TTM)0.04
Shares Outstanding244,475,450
10 Day Avg. Volume1,601,669
30 Day Avg. Volume1,522,029
Financial Highlights & Ratios
PEG Ratio0.07
Price to Book (P/B)1.42
Price to Sales (P/S)0.37
P/FCF Ratio4.36
Enterprise Value/Market Cap1.60
Enterprise Value/Revenue1.11
Enterprise Value/Gross Profit3.21
Enterprise Value/Ebitda11.38
Forecast
1Y Price Target
$10.80Price Target Upside25.00% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)1.11
Revenue Forecast (FY)$3.25B
Stagwell Business Overview & Revenue Model
Company Description
Stagwell Inc. offers a wide array of specialized services, including digital transformation, data-driven performance media, consumer insights and strategic planning, and creative communications solutions. The company operates through three distinc...
How the Company Makes Money
Stagwell primarily makes money by delivering marketing and advertising services to clients under contracted engagements, earning service fees that are recognized as it performs the work. Its revenue model is largely services-based and typically in...
Stagwell Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Mar 04, 2027
Earnings Call Sentiment Positive
The call emphasized strong, broad-based organic growth, notable outperformance from Digital Transformation and Communications, margin expansion, record net new business and improving operational efficiency. Weaknesses are concentrated in Marketing Services and Media & Commerce, modest contribution from Marketing Cloud, elevated net leverage today, and early-stage risk for new product initiatives plus some timing reliance on political activity. Overall the positive operating momentum, profitability improvement and active capital return program outweigh the isolated segment weaknesses and near-term balance sheet considerations.Positive Updates
Record Quarter and Top-Line Growth
Delivered the biggest second quarter in company history with total revenue of $786M (11% YoY) and net revenue of $632M (6% YoY). Organic revenue grew 10% YoY and organic net revenue grew 5% YoY.
Negative Updates
Slower Growth in Marketing Services and Media & Commerce
Marketing Services delivered only 0.5% organic net revenue growth ($243M net revenue) and Media & Commerce grew 1% organically to $155M — both lagging other segments and indicating pockets of stagnation.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Quarter and Top-Line Growth
Delivered the biggest second quarter in company history with total revenue of $786M (11% YoY) and net revenue of $632M (6% YoY). Organic revenue grew 10% YoY and organic net revenue grew 5% YoY.
Read all positive updates
Company Guidance
Stagwell reiterated full‑year net revenue growth of 8%–12% and adjusted EBITDA of $475M–$525M, raised adjusted EPS guidance to $1.03–$1.17 (reflecting YTD buybacks of ~14.4M shares for $88M, including 5.9M in Q2 at $6.22 avg, leaving 244.4M shares outstanding, down ~6.4% YoY), and reaffirmed a free cash‑flow conversion target of 50%–60% of adjusted EBITDA. Management said growth will be largely organic, expects to exit 2026 with net leverage in the mid‑2s (Q2 net leverage 3.04x), has ~$16M of committed enterprise tech revenue plus ~$16M in pipeline toward a $25M bookings goal, and expects deferred acquisition consideration (~$57M at quarter end) to be negligible by year‑end. The company has actioned ~$70M of annualized cost savings (target $80M–$100M), expects CapEx/capitalized software to be in line with last year, and finished the quarter with $360M revolver balance and $374M of unused borrowing capacity.Stagwell Financial Statement Overview
Summary
Income Statement
52
Neutral
Balance Sheet
38
Negative
Cash Flow
70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.11B | 2.91B | 2.84B | 2.53B | 2.69B | 1.47B |
| Gross Profit | 1.08B | 1.06B | 998.24M | 906.00M | 1.01B | 562.51M |
| EBITDA | 304.14M | 403.97M | 356.81M | 401.20M | 360.29M | 227.94M |
| Net Income | 9.04M | 29.10M | 2.26M | 134.00K | 19.92M | 21.04M |
Balance Sheet | ||||||
| Total Assets | 4.21B | 4.21B | 3.91B | 3.77B | 4.00B | 4.06B |
| Cash, Cash Equivalents and Short-Term Investments | 132.20M | 104.54M | 131.34M | 119.74M | 220.59M | 184.01M |
| Total Debt | 1.67B | 1.61B | 1.66B | 1.49B | 1.56B | 1.61B |
| Total Liabilities | 3.48B | 3.41B | 3.12B | 2.93B | 3.03B | 3.13B |
| Stockholders Equity | 710.30M | 758.39M | 331.73M | 356.69M | 498.65M | 370.75M |
Cash Flow | ||||||
| Free Cash Flow | 368.24M | 247.29M | 88.85M | 38.59M | 312.15M | 178.23M |
| Operating Cash Flow | 412.73M | 291.03M | 142.86M | 81.01M | 347.59M | 200.86M |
| Investing Cash Flow | -145.83M | -113.68M | -162.47M | 155.95M | -116.28M | 163.95M |
| Financing Cash Flow | -266.97M | -210.02M | 36.94M | -339.86M | -186.74M | -273.41M |
Stagwell Technical Analysis
Positive
8.64
Price Trends
8.65
Positive
8.18
Positive
7.13
Positive
Market Momentum
0.09
Positive
52.30
Neutral
26.98
Neutral
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 8.64 is below the 20-day moving average (MA) of 8.80, below the 50-day MA of 8.65, and above the 200-day MA of 7.13, indicating a bullish trend. The MACD of 0.09 indicates Positive momentum. The RSI at 52.30 is Neutral, neither overbought nor oversold. The STOCH value of 26.98 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
68 Neutral | $21.22B | 31.11 | 6.82% | 4.11% | 54.10% | -73.30% | |
65 Neutral | $1.90B | 3.13 | 34.27% | 2.03% | -8.46% | -157.54% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
58 Neutral | $2.16B | 136.27 | 2.16% | 6.16% | 6.17% | 351.09% | |
55 Neutral | $368.64M | -1.35 | -51.48% | ― | 2.24% | 18.11% | |
53 Neutral | $5.52B | -17.28 | -9.33% | 3.88% | -2.97% | -165.26% | |
48 Neutral | $13.03M | -3.50 | -46.05% | ― | 12.55% | 86.16% |
* Communication Services Sector Average
STGW
Stagwell
8.83
4.08
85.89%
ZD
Ziff Davis
55.37
21.65
64.21%
OMC
Omnicom Group
77.77
5.53
7.65%
WPP
WPP
25.80
3.41
15.24%
DLPN
Dolphin Entertainment
1.00
-0.79
-44.13%
ADV
Advantage Solutions
28.75
-5.25
-15.44%
Stagwell Corporate Events
Business Operations and StrategyFinancial Disclosures
Stagwell lifts 2026 guidance on strong Q3 performance
Positive
Oct 29, 2026
On October 29, 2026, Stagwell Inc. reported that third-quarter 2026 revenue rose 10% year over year to $816 million and net revenue climbed 8% to $664 million, with organic net revenue up 11% and 7%, respectively. The company’s Digital Trans...
Executive/Board Changes
Stagwell Announces Upcoming Resignation of Board Director
Neutral
Oct 5, 2026
On October 2, 2026, Stagwell Inc. announced that director Bradley J. Gross had notified the Board of his decision to resign. His resignation from the Board is scheduled to become effective on October 16, 2026, marking a change in the company’...
Business Operations and StrategyExecutive/Board Changes
Stagwell Strengthens Board with New Independent Director
Positive
Aug 4, 2026
On July 29, 2026, Stagwell Inc.’s board appointed Beth J. Kaplan as an independent director, effective July 31, 2026, with her initial term running until the company’s 2027 annual meeting of stockholders. The board affirmed that Kaplan...
Business Operations and StrategyExecutive/Board Changes
Stagwell Extends CEO Mark Penn’s Contract and Compensation
Positive
Aug 3, 2026
On July 28, 2026, Stagwell Inc. amended CEO Mark Penn’s employment agreement, extending his term through July 31, 2029 and raising his annual base salary to $1,400,000 effective August 1, 2026. The amendment also set his annual bonus target ...
Business Operations and StrategyStock BuybackFinancial Disclosures
Stagwell Raises 2026 Outlook After Strong Second Quarter
Positive
Jul 30, 2026
On July 30, 2026, Stagwell reported second-quarter 2026 results showing revenue up 11% year-on-year to $786 million and net revenue up 6% to $632 million, with organic net revenue growth of 10% and strong momentum in its Digital Transformation seg...
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.