Stagwell (NASDAQ:STGW) Stock Jumps 9% on Strong Earnings

Key Points

• Stagwell shares jumped 9% after the company reported quarterly EPS of $0.34, beating analyst expectations of $0.31. Revenue rose 9.8% year over year to $816.03 million, though it fell short of the $838.38 million consensus estimate.
• Analysts remain broadly bullish, with a consensus rating of “Moderate Buy” and an average price target of $10.17. Several firms recently raised their targets to $10, while Goldman Sachs initiated coverage with a $13 target and a buy rating.
• Institutional investors own 35.61% of Stagwell, and several hedge funds recently increased or initiated positions. However, insider Frank Lanuto sold 62,000 shares, reducing his holdings by 11.19%.

Stagwell Inc. (NASDAQ:STGW - Get Free Report)'s stock price rose 9% during mid-day trading on Thursday following a better than expected earnings announcement. The company traded as high as $9.64 and last traded at $9.6250. 1,663,195 shares were traded during trading, an increase of 4% from the average daily volume of 1,599,816 shares. The stock had previously closed at $8.83.

The company reported $0.34 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.31 by $0.03. Stagwell had a return on equity of 27.30% and a net margin of 0.53%. The business had revenue of $816.03 million for the quarter, compared to the consensus estimate of $838.38 million. During the same period in the prior year, the business posted $0.24 earnings per share. The company's quarterly revenue was up 9.8% compared to the same quarter last year.

Wall Street Analysts Forecast Growth

STGW has been the topic of several research reports. Rosenblatt Securities increased their price target on shares of Stagwell from $9.00 to $10.00 and gave the stock a "buy" rating in a report on Tuesday, August 4th. Wells Fargo & Company raised their target price on Stagwell from $8.00 to $10.00 and gave the stock an "overweight" rating in a report on Friday, July 31st. The Goldman Sachs Group started coverage on Stagwell in a research report on Monday, October 5th. They issued a "buy" rating and a $13.00 price objective on the stock. Weiss Ratings raised shares of Stagwell from a "hold (c-)" rating to a "hold (c)" rating in a report on Thursday, October 8th. Finally, Needham & Company LLC boosted their target price on shares of Stagwell from $8.00 to $10.00 and gave the company a "buy" rating in a research note on Thursday, July 30th. One investment analyst has rated the stock with a Strong Buy rating, five have issued a Buy rating and two have assigned a Hold rating to the stock. According to data from MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and a consensus target price of $10.17.

Insider Transactions at Stagwell

In other news, insider Frank Lanuto sold 62,000 shares of the firm's stock in a transaction that occurred on Friday, July 31st. The stock was sold at an average price of $8.46, for a total value of $524,520.00. Following the completion of the sale, the insider directly owned 491,977 shares of the company's stock, valued at $4,162,125.42. This trade represents a 11.19% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Insiders own 11.20% of the company's stock.

Hedge Funds Weigh In On Stagwell

Several hedge funds have recently added to or reduced their stakes in STGW. Sei Investments Co. raised its stake in Stagwell by 104.2% during the first quarter. Sei Investments Co. now owns 371,788 shares of the company's stock valued at $2,339,000 after buying an additional 189,751 shares in the last quarter. Bank of New York Mellon Corp bought a new stake in shares of Stagwell in the 2nd quarter valued at approximately $3,907,000. First Trust Advisors LP increased its holdings in shares of Stagwell by 53.0% in the 1st quarter. First Trust Advisors LP now owns 673,642 shares of the company's stock valued at $4,237,000 after acquiring an additional 233,489 shares during the last quarter. Empowered Funds LLC acquired a new stake in shares of Stagwell during the 1st quarter valued at approximately $2,862,000. Finally, Kestra Private Wealth Services LLC acquired a new stake in shares of Stagwell during the 1st quarter valued at approximately $846,000. 35.61% of the stock is currently owned by hedge funds and other institutional investors.

Stagwell Stock Up 9.3%

The company has a quick ratio of 0.81, a current ratio of 0.81 and a debt-to-equity ratio of 2.11. The company has a market capitalization of $2.36 billion, a PE ratio of 160.25 and a beta of 1.30. The business's 50 day simple moving average is $8.65 and its 200 day simple moving average is $7.12.

About Stagwell

Stagwell Inc is a global marketing and communications services company that helps brands, organizations and institutions develop strategies, engage audiences and manage their reputations. Its services include advertising, media, public relations, digital marketing, consumer insights, creative development and marketing technology.

The company operates through a network of agencies and specialized businesses serving clients across North America, Europe, Asia-Pacific and other international markets.

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