Omnicom Group Inc. Fundamental Analysis (NYSE: OMC)
Omnicom Group Inc. Fundamental Analysis (NYSE: OMC)
Omnicom Group Inc. (NYSE: OMC) shows weak financial fundamentals with a PE ratio of 46.98, profit margin of 1.75%, and ROE of 4.34%. The company generates $30.0B in annual revenue with strong year-over-year growth of 10.09%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 43.9/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze OMC's fundamental strength across five key dimensions:
Efficiency Score
WeakOMC struggles to generate sufficient returns from assets.
Valuation Score
ModerateOMC shows balanced valuation metrics.
Growth Score
ModerateOMC shows steady but slowing expansion.
Financial Health Score
WeakOMC carries high financial risk with limited liquidity.
Profitability Score
WeakOMC struggles to sustain strong margins.
Key Financial Metrics
Is OMC Expensive or Cheap?
P/E Ratio
OMC trades at 46.98 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, OMC's PEG of -0.64 indicates potential undervaluation.
Price to Book
The market values Omnicom Group Inc. at 1.81 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 9.19 times EBITDA. This is generally considered low.
How Well Does OMC Make Money?
Net Profit Margin
For every $100 in sales, Omnicom Group Inc. keeps $1.75 as profit after all expenses.
Operating Margin
Core operations generate 13.92 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $4.34 in profit for every $100 of shareholder equity.
ROA
Omnicom Group Inc. generates $0.78 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Omnicom Group Inc. produces operating cash flow of $3.46B, showing steady but balanced cash generation.
Free Cash Flow
Omnicom Group Inc. generates strong free cash flow of $3.20B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $11.66 in free cash annually.
FCF Yield
OMC converts 9.89% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
46.98
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.64
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.81
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.08
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.15
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.92
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.04
vs 25 benchmark
ROA
Return on assets percentage
0.008
vs 25 benchmark
ROCE
Return on capital employed
0.13
vs 25 benchmark
How OMC Stacks Against Its Sector Peers
| Metric | OMC Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 46.98 | 19.53 | Worse (Expensive) |
| ROE | 4.34% | 597.00% | Weak |
| Net Margin | 1.75% | 492.00% | Weak |
| Debt/Equity | 1.15 | 0.80 | Weak (High Leverage) |
| Current Ratio | 0.92 | 1.89 | Weak Liquidity |
| ROA | 0.78% | 310.00% | Weak |
OMC outperforms its industry in 0 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Omnicom Group Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
40.07%
Industry Style: Growth, Technology, Streaming
High GrowthEPS CAGR
-106.12%
Industry Style: Growth, Technology, Streaming
DecliningFCF CAGR
81.97%
Industry Style: Growth, Technology, Streaming
High Growth