Is Stagwell, Inc. overvalued or undervalued?

As of 12 June 2025, Stagwell, Inc. has moved from an attractive to a fair valuation grade. The company is currently considered overvalued based on its financial metrics. The P/E ratio stands at 26, significantly higher than the peer average of approximately 24.83, while the EV to EBITDA ratio is 8.23 compared to the peer average of 8.13. Additionally, the Price to Book Value is 3.59, indicating a premium valuation relative to its book value.
In comparison to its peers, Stagwell's return on equity (ROE) is 14.09%, which is competitive but does not justify its elevated valuation ratios. The company's recent stock performance has also lagged behind the S&P 500, with a year-to-date decline of 32.67% compared to a modest gain of 2.44% for the index. This underperformance, combined with the high valuation ratios, supports the conclusion that Stagwell, Inc. is overvalued at its current price of $4.43.