Stagwell (NASDAQ:STGW) Issues Quarterly Earnings Results

Key Points

• Stagwell beat quarterly expectations: Adjusted EPS was $0.25 versus the $0.17 consensus, while revenue rose 11.2% year over year to $786.3 million. Adjusted EBITDA increased 15% to $108.7 million, with margins expanding to 17.2%.
• Growth momentum remains strong: Digital transformation organic net revenue grew 18%, and record net new business reached $171 million, up 45% year over year. Management cited strong demand for AI-enabled services and expects continued double-digit organic growth.
• Outlook improved, but risks remain: Full-year adjusted EPS guidance was raised to $1.03–$1.17, though revenue guidance of $3.0–$3.1 billion is below consensus and the company posted an $8 million GAAP net loss. Analysts including Wells Fargo and Needham raised their price targets to $10.

Stagwell (NASDAQ:STGW - Get Free Report) announced its quarterly earnings results on Thursday. The company reported $0.25 EPS for the quarter, topping the consensus estimate of $0.17 by $0.08, Briefing.com reports. Stagwell had a net margin of 0.64% and a return on equity of 24.12%. The company had revenue of $786.31 million for the quarter, compared to analyst estimates of $754.56 million. During the same quarter in the prior year, the business posted $0.17 EPS. Stagwell's quarterly revenue was up 11.2% on a year-over-year basis. Stagwell updated its FY 2026 guidance to 1.030-1.170 EPS.

Here are the key takeaways from Stagwell's conference call:

• Strong Q2 growth and margin expansion: Organic revenue grew 10% and organic net revenue 5%, while adjusted EBITDA rose 15% to $108.7 million and margin expanded 143 basis points to 17.2%, aided by cost controls.
• Digital transformation is the primary growth engine: The segment delivered 18% organic net revenue growth and a 30% adjusted EBITDA margin, driven by demand for AI-enabled strategy, technology, creativity, and workflow transformation.
• Record new business momentum: Net new business reached $171 million, up 45% year over year, with major wins including IBM’s creative account, Visit California, Hershey, Mondelez, and Heineken. Management expects the year-end pipeline to be approximately 30% above last year.
• Guidance and shareholder returns improved: Full-year net revenue, adjusted EBITDA, and free-cash-flow conversion guidance were reiterated, while adjusted EPS guidance was raised to $1.03–$1.17. The company repurchased 14.4 million shares year to date and expects continued buybacks.
• Second-half outlook is favorable but includes execution and leverage considerations: Management expects double-digit organic net revenue growth led by digital transformation, communications, and election-related activity, while targeting year-end net leverage in the mid-twos and continuing selective acquisitions and technology investment.

Stagwell Stock Performance

Shares of NASDAQ STGW traded down $0.02 during trading hours on Friday, hitting $8.47. 1,292,448 shares of the stock were exchanged, compared to its average volume of 1,663,330. The company has a debt-to-equity ratio of 1.99, a current ratio of 0.83 and a quick ratio of 0.83. The company's 50 day moving average is $7.15 and its 200 day moving average is $6.40. The firm has a market capitalization of $2.10 billion, a P/E ratio of 120.79 and a beta of 1.26. Stagwell has a one year low of $4.28 and a one year high of $8.50.

Insiders Place Their Bets

In other news, CEO Mark Jeffery Penn bought 20,000 shares of the business's stock in a transaction on Wednesday, May 13th. The stock was purchased at an average price of $5.88 per share, with a total value of $117,600.00. Following the transaction, the chief executive officer directly owned 23,034,990 shares in the company, valued at approximately $135,445,741.20. The trade was a 0.09% increase in their ownership of the stock. The acquisition was disclosed in a document filed with the SEC, which is accessible through the SEC website. Also, Director Bradley J. Gross sold 2,163,790 shares of the firm's stock in a transaction dated Monday, May 4th. The shares were sold at an average price of $6.04, for a total value of $13,069,291.60. Following the completion of the sale, the director directly owned 8,789 shares in the company, valued at approximately $53,085.56. This represents a 99.60% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. 11.20% of the stock is owned by insiders.

Institutional Trading of Stagwell

Several hedge funds have recently added to or reduced their stakes in STGW. JPMorgan Chase & Co. increased its position in Stagwell by 54.1% in the 4th quarter. JPMorgan Chase & Co. now owns 2,676,532 shares of the company's stock worth $13,088,000 after buying an additional 939,888 shares during the period. Hotchkis & Wiley Capital Management LLC boosted its position in shares of Stagwell by 4.6% in the third quarter. Hotchkis & Wiley Capital Management LLC now owns 21,034,577 shares of the company's stock valued at $118,425,000 after acquiring an additional 920,431 shares during the period. Dimensional Fund Advisors LP grew its stake in shares of Stagwell by 26.8% in the fourth quarter. Dimensional Fund Advisors LP now owns 4,111,549 shares of the company's stock worth $20,107,000 after acquiring an additional 869,562 shares during the last quarter. AQR Capital Management LLC grew its stake in shares of Stagwell by 255.4% in the fourth quarter. AQR Capital Management LLC now owns 946,033 shares of the company's stock worth $4,626,000 after acquiring an additional 679,874 shares during the last quarter. Finally, Two Sigma Investments LP bought a new position in Stagwell during the third quarter worth $2,431,000. Institutional investors own 35.61% of the company's stock.

Analyst Upgrades and Downgrades

Several research firms recently issued reports on STGW. Wells Fargo & Company lifted their price objective on shares of Stagwell from $8.00 to $10.00 and gave the company an "overweight" rating in a research note on Friday. Rosenblatt Securities reissued a "buy" rating and set a $9.00 target price on shares of Stagwell in a research report on Tuesday, May 5th. Needham & Company LLC raised their target price on Stagwell from $8.00 to $10.00 and gave the company a "buy" rating in a report on Thursday. Wall Street Zen cut Stagwell from a "strong-buy" rating to a "buy" rating in a research report on Saturday, May 2nd. Finally, Weiss Ratings downgraded Stagwell from a "hold (c-)" rating to a "sell (d+)" rating in a research note on Monday, May 4th. Five analysts have rated the stock with a Buy rating, two have given a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat.com, Stagwell currently has an average rating of "Moderate Buy" and an average price target of $9.00.

Stagwell News Roundup

Here are the key news stories impacting Stagwell this week:

• Positive Sentiment: Analysts raised their price targets. Wells Fargo lifted its target from $8 to $10 and assigned an “overweight” rating, implying approximately 21% upside from the referenced share price. Needham also raised its target to $10 and upgraded the stock to “buy.” Benzinga analyst rating update
• Positive Sentiment: Adjusted earnings and revenue exceeded expectations. Stagwell reported second-quarter adjusted EPS of $0.25, compared with the $0.17 analyst consensus and $0.17 a year earlier. Revenue increased 11% year over year to $786.3 million, surpassing the $754.6 million consensus estimate. Stagwell Q2 earnings and revenues surpass estimates
• Positive Sentiment: Operating momentum remained strong. Adjusted EBITDA rose 15% to $109 million, digital transformation net revenue grew organically 18%, and quarterly net new business reached a record $171 million, with $540 million over the last twelve months. Stagwell reports second-quarter results
• Positive Sentiment: Full-year adjusted EPS guidance was raised to $1.03-$1.17, above the $1.01 consensus estimate, reinforcing the improved earnings outlook.
• Neutral Sentiment: Investor attention is likely to remain focused on Stagwell’s earnings presentation and conference call for details on client demand, margins and the sustainability of new-business wins. Stagwell 2026 Q2 earnings presentation
• Negative Sentiment: Revenue guidance was softer than expected. Stagwell projected full-year 2026 revenue of $3.0-$3.1 billion, below the $3.2 billion consensus estimate.
• Negative Sentiment: The company posted a second-quarter GAAP net loss of $8 million, or $0.03 per share, compared with a $5 million loss a year earlier. This contrasts with the strong adjusted EPS result and highlights continuing earnings-quality concerns.

Stagwell Company Profile

Stagwell Inc is a modern marketing and communications network that partners with global organizations to drive brand growth through data-driven insights and creative solutions. The company operates a diversified portfolio of specialized agencies and technology platforms, offering services that span digital marketing, advertising, public relations, consumer and market research, social media strategy, and commerce consulting. By integrating research, creative, media, and technology under a unified network, Stagwell aims to deliver end-to-end marketing solutions tailored to the evolving needs of clients in sectors such as technology, healthcare, consumer goods, and financial services.

Founded in 2015 by long-time political strategist and pollster Mark Penn, Stagwell has expanded organically and through strategic acquisitions to build capabilities across the marketing value chain.

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