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There's been a notable change in appetite for Stagwell Inc. (NASDAQ:STGW) shares in the week since its quarterly report, with the stock down 13% to US$4.87. It was a pretty negative result overall, with revenues of US$652m missing analyst predictions by 4.3%. Worse, the business reported a statutory loss of US$0.03 per share, a substantial decline on analyst expectations of a profit. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the consensus forecast from Stagwell's seven analysts is for revenues of US$2.92b in 2025. This reflects a modest 3.4% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 14,486% to US$0.34. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.97b and earnings per share (EPS) of US$0.42 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a substantial drop in EPS estimates.
See our latest analysis for Stagwell
The consensus price target held steady at US$8.48, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Stagwell analyst has a price target of US$10.00 per share, while the most pessimistic values it at US$6.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Stagwell's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 4.5% growth on an annualised basis. This is compared to a historical growth rate of 6.4% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 2.7% annually. So it's pretty clear that, while Stagwell's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.