> ## Content Index > Fetch the complete content index at: https://www.bullished.co/llms.txt > Use this file to discover other available public pages before exploring further. # Stagwell CEO Mark Penn Says Software Pivot Could Merit A Stock Price 'Several Times Our Existing Value' - URL: https://www.bullished.co/stagwell-ceo-mark-penn-says-software-pivot-could-merit-a-stock-price-several-times-our-a27e9394/ - Published: 2026-10-29T14:26:22.000Z - Updated: 2026-10-29T14:43:43.000Z - Description: Penn told analysts that growth in software and digital transformation could justify a far higher valuation, then told investors to judge for themselves. - Author: Matteo Parrino - Tags: Earnings, STGW, Industry: Communication Services Stagwell Chairman and CEO Mark Penn said on the company's third-quarter earnings call Thursday that its software and digital transformation businesses [could merit](https://seekingalpha.com/news/4660130-stagwell-non-gaap-eps-of-0%5F34-beats-by-0%5F03-revenue-of-816m-misses-by-18%5F21m?ref=bullished.co) "a stock price several times our existing value." He added, "But you be the judge." ## Penn's "do the math" pitch Penn, whose company is a marketing and communications network, said software and digital transformation revenue is "worth two or three times that of marketing service revenue." His case rests on double-digit growth in digital transformation and "30% to 40% growth of software sales each year for the next two years." Investor relations head Ben Allanson said an illustrative valuation model in the company's slide deck assumes a 32% margin for digital transformation. It assumes 35% software growth at a 45% margin, he said, while calling it "obviously not guidance." Allanson said a sum-of-the-parts view is the way to start thinking about the business. Penn said [Stagwell](https://www.bullished.co/tag/stgw/) is pivoting from a primarily marketing services company to a marketing transformation company selling AI-based software and services. He said that when he founded the firm he expected marketing services to be slower growth, with a gradual shift toward technology. ## A record quarter built on software CFO Ryan Greene said revenue grew 10% to [$816 million](https://seekingalpha.com/news/4660130-stagwell-non-gaap-eps-of-0%5F34-beats-by-0%5F03-revenue-of-816m-misses-by-18%5F21m?ref=bullished.co) and net revenue rose 8% to $664 million. Adjusted EBITDA climbed 25% to a record $144.8 million, a margin of 21.8% of net revenue. Adjusted EPS rose 42% to $0.34. The marketing cloud segment, which licenses subscription software and data products, grew organic net revenue 108% to $56 million. Its adjusted EBITDA margin was 44.3%, which Greene tied to software sales from the machines, the company's agentic AI products. Digital transformation net revenue rose 23% organically to $119 million at a 32.1% margin. Marketing services net revenue fell 9% to $218 million, down 7.5% organically. Media and commerce declined 2% organically to $159 million, with a $9 million Middle East drop weighing on it. Stagwell raised its full-year adjusted EBITDA outlook to $490 million to $540 million and adjusted EPS to [$1.07 to $1.21](https://wtop.com/national/2026/10/stagwell-q3-earnings-snapshot/?ref=bullished.co). It kept net revenue growth at 8% to 12%. Penn also doubled his 2027 enterprise tech bookings goal to $150 million; year-to-date bookings are $59 million against an initial goal of $25 million. ## Government work and a stock run Penn said Stagwell won its first major federal assignment, as prime subcontractor for work with the U.S. Central Command, with a total size of $1.5 billion over five years. He said the company conservatively expects to capture 10% in fees. Net leverage fell to 2.73 times, from 3.42 a year earlier. Stagwell bought back about 12.1 million shares year to date at an average $6.23. Stagwell shares rose about 5% to $9.28 in Thursday trading, and Zacks noted they have [risen about 80%](https://finance.yahoo.com/media-advertising/articles/stagwell-stgw-q3-earnings-top-113510502.html?.tsrc=rss&ref=bullished.co) this year. Stagwell said it will report fourth-quarter results on a call in the new year. Learn - [How To Read An Earnings Call Transcript: Start With Guidance, Then Find What's Missing →](https://www.bullished.co/learn/how-to-read-an-earnings-call/) How to read an earnings call transcript: check guidance first, look for dropped metrics, compare growth with last quarter, and watch hedged wording. ### Sources - [Stagwell Non-GAAP EPS of $0.34 beats by $0.03, revenue of $816M misses by $18.21M (STGW:NASDAQ) | Seeking Alpha](https://seekingalpha.com/news/4660130-stagwell-non-gaap-eps-of-0%5F34-beats-by-0%5F03-revenue-of-816m-misses-by-18%5F21m?ref=bullished.co) — seekingalpha.com - [Stagwell (STGW) Q3 Earnings Top Estimates](https://finance.yahoo.com/media-advertising/articles/stagwell-stgw-q3-earnings-top-113510502.html?.tsrc=rss&ref=bullished.co) — Yahoo Finance - [Stagwell: Q3 Earnings Snapshot – WTOP News](https://wtop.com/national/2026/10/stagwell-q3-earnings-snapshot/?ref=bullished.co) — wtop.com - [Stagwell: Q3 Earnings Snapshot | wusa9.com](https://www.wusa9.com/article/syndication/associatedpress/stagwell-q3-earnings-snapshot/616-9a0117d9-ffa9-4af9-92c8-7a9abbfb1040?ref=bullished.co) — Associated Press - [Stagwell’s Freestar deal brings buying and selling under one roof](https://digiday.com/media-buying/ad-tech-briefing-stagwells-freestar-deal-brings-buying-and-selling-under-one-roof/?ref=bullished.co) — digiday.com ### More on Stagwell - [Stagwell Expects About 10% Of A $1.5 Billion Central Command Subcontract In Fees](https://www.bullished.co/stagwell-expects-about-10-of-a-1-5-billion-central-command-subcontract-in-fees-a0fcb40a/) - [Stagwell Lifts 2026 Profit Outlook After Record Quarter, With Software Revenue Up 108%](https://www.bullished.co/stagwell-lifts-2026-profit-outlook-after-record-quarter-with-software-revenue-up-108-ba8bd202/) - [Stagwell Director Bradley Gross To Leave Board October 16, 8-K Says It Is Not A Dispute](https://www.bullished.co/stagwell-director-bradley-gross-to-leave-board-october-16-8-k-says-it-is-not-a-dispute-8b68311b/) [All Stagwell (STGW) coverage →](https://www.bullished.co/tag/stgw/)