Since March 2025, Interpublic Group has been in a holding pattern, floating around $26.36. The stock also fell short of the S&P 500’s 16.4% gain during that period.
Is now the time to buy Interpublic Group, or should you be careful about including it in your portfolio? Get the full stock story straight from our expert analysts, it’s free.
Why Do We Think Interpublic Group Will Underperform?
We don't have much confidence in Interpublic Group. Here are three reasons you should be careful with IPG and a stock we'd rather own.
1. Core Business Falling Behind as Demand Plateaus
We can better understand Advertising & Marketing Services companies by analyzing their organic revenue. This metric gives visibility into Interpublic Group’s core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement.
Over the last two years, Interpublic Group failed to grow its organic revenue. This performance was underwhelming and implies it may need to improve its products, pricing, or go-to-market strategy. It also suggests Interpublic Group might have to lean into acquisitions to accelerate growth, which isn’t ideal because M&A can be expensive and risky (integrations often disrupt focus). 
2. Projected Revenue Growth Shows Limited Upside
Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.
Over the next 12 months, sell-side analysts expect Interpublic Group’s revenue to stall. While this projection suggests its newer products and services will catalyze better top-line performance, it is still below average for the sector.
3. Free Cash Flow Margin Dropping
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
As you can see below, Interpublic Group’s margin dropped by 17.1 percentage points over the last five years. If its declines continue, it could signal increasing investment needs and capital intensity. Interpublic Group’s free cash flow margin for the trailing 12 months was 9.5%.
Final Judgment
Interpublic Group falls short of our quality standards. With its shares underperforming the market lately, the stock trades at 9.6× forward P/E (or $26.36 per share). While this valuation is optically cheap, the potential downside is huge given its shaky fundamentals. There are more exciting stocks to buy at the moment. We’d recommend looking at a safe-and-steady industrials business benefiting from an upgrade cycle.
Stocks We Like More Than Interpublic Group
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