The Interpublic Group of Companies, Inc.
The Interpublic Group of Companies, Inc. Fundamental Analysis
The Interpublic Group of Companies, Inc. (IPG) shows weak financial fundamentals with a PE ratio of 16.26, profit margin of 5.40%, and ROE of 14.96%. The company generates $10.2B in annual revenue with weak year-over-year growth of -1.81%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 34.6/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze IPG's fundamental strength across five key dimensions:
Efficiency Score
WeakIPG struggles to generate sufficient returns from assets.
Valuation Score
ExcellentIPG trades at attractive valuation levels.
Growth Score
WeakIPG faces weak or negative growth trends.
Financial Health Score
ModerateIPG shows balanced financial health with some risks.
Profitability Score
WeakIPG struggles to sustain strong margins.
Key Financial Metrics
Is IPG Expensive or Cheap?
P/E Ratio
IPG trades at 16.26 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, IPG's PEG of 0.66 indicates potential undervaluation.
Price to Book
The market values The Interpublic Group of Companies, Inc. at 2.45 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 5.06 times EBITDA. This is generally considered low.
How Well Does IPG Make Money?
Net Profit Margin
For every $100 in sales, The Interpublic Group of Companies, Inc. keeps $5.40 as profit after all expenses.
Operating Margin
Core operations generate 9.68 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $14.96 in profit for every $100 of shareholder equity.
ROA
The Interpublic Group of Companies, Inc. generates $3.25 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
The Interpublic Group of Companies, Inc. generates limited operating cash flow of $911.09M, signaling weaker underlying cash strength.
Free Cash Flow
The Interpublic Group of Companies, Inc. produces free cash flow of $803.18M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $2.21 in free cash annually.
FCF Yield
IPG converts 9.04% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
16.26
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.66
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.45
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.87
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.13
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.08
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.15
vs 25 benchmark
ROA
Return on assets percentage
0.03
vs 25 benchmark
ROCE
Return on capital employed
0.12
vs 25 benchmark
How IPG Stacks Against Its Sector Peers
| Metric | IPG Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 16.26 | 21.66 | Better (Cheaper) |
| ROE | 14.96% | 1190.00% | Weak |
| Net Margin | 5.40% | -55754.00% (disorted) | Weak |
| Debt/Equity | 1.13 | 1.32 | Neutral |
| Current Ratio | 1.08 | 1.59 | Neutral |
| ROA | 3.25% | -202359.00% (disorted) | Weak |
IPG outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews The Interpublic Group of Companies, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
7.64%
Industry Style: Growth, Technology, Streaming
GrowingEPS CAGR
8.16%
Industry Style: Growth, Technology, Streaming
GrowingFCF CAGR
-28.99%
Industry Style: Growth, Technology, Streaming
Declining