Omnicom Group (OMC) AI Stock Analysis

• Market Cap: $16.21B
• Dividend Yield: 3.39%
• Average Volume (3M): 3.55M
• Price to Earnings (P/E): 11.5
• Beta (1Y): 0.78
• Revenue Growth: 6.79%
• EPS Growth: 7.79%
• Country: US
• Employees: 74,900
• Sector: Communication Services
• Sector Strength: 82
• Industry: Traditional Media
• EPS (TTM): 7.45
• Shares Outstanding: 196,490,660
• 10 Day Avg. Volume: 4,873,527
• 30 Day Avg. Volume: 3,548,551
• PEG Ratio: 1.47
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.07
• Price to Cash Flow (P/CF): 2.20
• P/FCF Ratio: 2.10
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $105.60
• Price Target Upside: 31.98% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

Omnicom Group demonstrates strong financial performance with effective capital management, contributing to a high overall score. The positive sentiment from the earnings call and strategic initiatives, including significant new business wins and acquisitions, further support the company's growth potential. However, technical indicators suggest caution, as the stock is in a bearish trend, and challenges in specific sectors pose risks. The reasonable valuation and attractive dividend yield provide additional support, making Omnicom a compelling option in the traditional media industry.

Positive Factors

Acquisition

Omnicom's acquisition of Interpublic creates the new number-one global ad holding company.

Client Wins

Omnicom scored a big win of the Amazon US account recently, which should flow into revenue starting Q1'25.

Negative Factors

Integration Risks

Integration risk is real in terms of client, staff, and IT friction.

Omnicom Group Business Overview & Revenue Model

Company Description

Omnicom Group Inc. is a leading global marketing and corporate communications company headquartered in New York City. It operates through a network of agencies offering a diverse range of services including advertising, marketing services, specialty communications, interactive/digital media, and media buying services. Omnicom serves a broad spectrum of industries, including automotive, consumer products, healthcare, and technology, delivering customized solutions to enhance brand recognition and consumer engagement.

How the Company Makes Money

Omnicom Group generates revenue primarily through the provision of advertising and marketing communication services to a wide array of clients globally. The company earns money by offering a comprehensive suite of services such as strategic media planning and buying, digital and interactive marketing, direct and promotional marketing, public relations, and other specialty communications services. Its revenue streams are largely derived from fees and commissions for these services, with major clients often entering into long-term contracts. Omnicom's earnings are also influenced by its strategic partnerships and acquisitions, which expand its service offerings and market reach. Additionally, the company benefits from its global presence, allowing it to serve multinational clients with integrated solutions tailored to various regional markets.

Omnicom Group Financial Statement Overview

Summary

Omnicom Group's financial performance is robust, with strong profitability, growth, and cash flow metrics. The company has demonstrated effective capital management and operational efficiency. While the balance sheet shows manageable debt levels, ongoing monitoring of leverage is advisable to mitigate potential risks in changing economic conditions. Overall, Omnicom Group is well-positioned in the traditional media industry, reflecting both stability and growth potential.

Income Statement

Omnicom Group exhibits strong profitability with a gross profit margin of approximately 18.6% and a net profit margin of 10% in 2024. The company has shown consistent revenue growth, with a 6.8% increase from 2023 to 2024, indicating robust market demand and effective business strategies. EBIT and EBITDA margins are solid, reflecting operational efficiency.

Balance Sheet

The balance sheet reveals a stable financial structure with a debt-to-equity ratio of 1.64, which is manageable. The equity ratio is around 14.2%, suggesting moderate leverage. Return on equity is strong at 37.5%, highlighting effective use of equity capital to generate profits. However, the relatively high debt levels pose a potential risk if market conditions change.

Cash Flow

Cash flow analysis shows a healthy free cash flow growth rate of 18.6% in 2024, indicating strong cash generation capabilities. The operating cash flow to net income ratio of 1.1 reflects efficient cash conversion, while the free cash flow to net income ratio of 1.01 underscores the company's ability to maintain liquidity and fund operations effectively.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
15.69B	14.69B	14.29B	14.29B	13.17B
	Gross Profit
2.92B	2.71B	2.68B	2.79B	2.18B
	EBIT
2.27B	2.10B	2.08B	2.20B	1.60B
	EBITDA
2.61B	2.42B	2.38B	2.32B	1.95B
	Net Income Common Stockholders
1.48B	1.39B	1.30B	1.40B	951.20M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.34B	4.43B	4.34B	5.32B	5.60B
	Total Assets
29.62B	28.04B	27.00B	28.42B	27.65B
	Total Debt
6.87B	6.50B	6.49B	6.65B	6.93B
	Net Debt
2.53B	2.07B	2.21B	1.33B	1.32B
	Total Liabilities
24.45B	23.40B	22.84B	24.65B	24.07B
	Stockholders Equity
4.19B	3.62B	3.25B	3.27B	3.08B
Cash Flow		Free Cash Flow
1.59B	1.34B	848.30M	1.28B	1.65B
	Operating Cash Flow
1.73B	1.42B	926.50M	1.95B	1.72B
	Investing Cash Flow
-1.06B	79.10M	-380.90M	-709.20M	-136.10M
	Financing Cash Flow
-582.00M	-1.39B	-1.36B	-1.39B	-408.40M

Omnicom Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 80.01
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OMC, the sentiment is Negative. The current price of 80.01 is below the 20-day moving average (MA) of 82.07, below the 50-day MA of 83.71, and below the 200-day MA of 92.01, indicating a bearish trend. The MACD of -0.62 indicates Negative momentum. The RSI at 40.27 is Neutral, neither overbought nor oversold. The STOCH value of 30.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OMC.

Omnicom Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OMC	76 Outperform	$16.21B	11.47	37.92%	3.39%	6.79%	7.79%
PUBGY	73 Outperform	$25.73B	14.33	16.11%	2.54%	8.35%	26.60%
IPG	70 Outperform	$10.18B	15.44	17.82%	4.83%	-1.81%	-35.74%
WPP	63 Neutral	$8.82B	12.72	16.04%	6.16%	4.34%	-59.80%
Sector *	59 Neutral	$29.20B	0.14	-12.92%	4.06%	2.18%	-51.74%
ACCO	48 Neutral	$443.97M	―	-14.59%	6.28%	-9.09%	-356.14%
HHS	45 Neutral	$35.93M	―	-143.62%	―	-4.66%	-229.79%

Omnicom Group Corporate Events

Omnicom Group Reports Strong 2024 Financial Results

On February 4, 2025, Omnicom Group announced its financial results for the fourth quarter and full year ending December 31, 2024. The company reported a revenue of $4.3 billion for the fourth quarter and $15.7 billion for the full year, both reflecting a 5.2% organic growth. With a net income of $448 million in the fourth quarter and $1,480.6 million for the full year, Omnicom’s strong operational execution has positioned it well for future growth. The company is optimistic about its proposed acquisition of Interpublic, which is expected to enhance its market offering by combining business and cultural strengths, potentially resulting in significant revenue and cost synergies.