Stagwell (STGW): Evaluating Valuation as In-Pulse Partnership with Zabka Polska Targets New Analytics Growth

If you are following Stagwell (STGW), the new joint venture with Zabka Polska to launch In-Pulse is a development you will want to pay attention to. With this alliance, Stagwell is not just partnering with any retailer, but with Poland’s largest convenience store network, combining local scale with advanced marketing analytics. The initiative creates a foothold for Stagwell in a promising international market and highlights its push to deliver real-time, actionable insights for consumer-focused businesses.

This news arrives after a stretch where Stagwell shares have underperformed over the past year, but have seen some growth recently. The stock is down 17% in the past year, though it has climbed 16% over the past 3 months. Momentum had faded for a while, but these growth-focused moves suggest a possible shift. In recent weeks, the company has also made leadership changes and presented at major industry conferences, adding context to what looks like a period of transition.

With the headline-making Polish alliance and hints of renewed momentum, is the market undervaluing Stagwell’s prospects, or has future growth already found its way into the price?

Most Popular Narrative: 32.5% Undervalued

According to the most widely followed narrative, Stagwell is considered to be trading well below its calculated fair value, making it notably undervalued at current prices.

Expansion and integration of proprietary digital and martech platforms (such as Code and Ink, and the "machine") are creating higher-margin, recurring revenue streams and improving operational efficiencies. These developments could drive net margin expansion. Globalization of brands and campaigns is opening new markets for Stagwell, especially with recent M&A-driven expansion into Asia Pacific and the Middle East. This is providing a catalyst for topline revenue growth and a more diversified client portfolio.

Looking for the tactical blueprint behind this striking undervaluation? The narrative’s calculated value relies on a growth trajectory that breaks from the past, focusing on increased earnings and a profit multiple that most investors might not expect. Want to know the specific targets and the market-beating metrics used to build this bullish case? Get the inside view on what supports the story of Stagwell’s dramatic potential upside.

Result: Fair Value of $8.19 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing integration challenges or a major client pulling back could quickly alter Stagwell’s growth path and investor confidence.

Find out about the key risks to this Stagwell narrative.

Another View: Discounted Cash Flow Analysis

Looking at Stagwell through our DCF model offers a fresh angle. This suggests the market price may still sit well below estimated intrinsic value. Does this reinforce the optimistic outlook, or does it merely spotlight uncertainty in forecasting the future?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Stagwell for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Stagwell Narrative

If you want to dive in on your own terms and put the numbers to the test, you can craft a personal narrative in just a few minutes. Do it your way.

A great starting point for your Stagwell research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

Ready for Your Next Investing Move?

Don’t wait on the sidelines while others snap up tomorrow’s big winners. Use the Simply Wall Street Screener to spot unique investment opportunities tailored to your interests, and give yourself the best chance to stay ahead of the curve.

• Accelerate your growth strategy by targeting tomorrow’s tech leaders. Start with the latest breakthroughs in artificial intelligence when you check out AI penny stocks.
• Secure your portfolio with reliable income streams by examining top choices offering attractive yields, all neatly presented in dividend stocks with yields > 3%.
• Uncover overlooked values and seize market inefficiencies by reviewing businesses trading below their true potential using undervalued stocks based on cash flows.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com