It has been about a month since the last earnings report for Omnicom (OMC). Shares have lost about 3.2% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Omnicom due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Omnicom Q4 Earnings and Revenues Beat Estimates

Omnicom Group Inc. reported impressive fourth quarter 2024 results. Earnings and revenues beat the Zacks Consensus Estimate.

Earnings of $2.41 per share (excluding 15 cents from non-recurring items) beat the consensus estimate by 4% and rose 9.6% from the year-ago quarter. Total revenues of $4.3 billion outpaced the consensus mark marginally and grew 6.4% on a year-over-year basis. 

Results were aided by strong growth in its advertising and media segment. The U.S. presidential election and the holiday season resulted in higher political and retail advertisements in the final quarter of 2024.

Top-line growth was led by a rise of 5.2% in revenues from organic growth and a 1.8% increment in acquisition revenues, net of disposition revenues, driven by the acquisition of Flywheel Digital in the Precision Marketing segment.

OMC's Organic Growth Across Disciplines & Regions

Across fundamental disciplines, Experiential revenues improved 4.9% year over year compared with our estimate of a 16.3% rise. Revenues from Advertising & Media increased 7.1% from the year-ago quarter, underperforming our expected rise of 11.1%. Branding & Retail Commerce revenues rose 11.6%, outperforming our estimate of a 2.2% rise. Public Relations revenues jumped 10.3% year over year compared with our anticipated 9% growth.

Precision marketing revenues met our estimate and rose 9.1% year over year. Execution and Support increased by a margin compared with our expected growth of 5.9%. Healthcare revenues declined 4.3% organically on a year-over-year basis against our estimate of a 22.6% fall.

Across regional markets, year-over-year organic revenue growth was 9.9% in the United States, 1.8% in the Asia Pacific, 1.2% in the United Kingdom, 1.7% in the Middle East & Africa, 16.1% in Latin America and 0.1% in Other North America. Revenues declined 2.1% in the European Markets & Other Europe.

Margin Performance of Omnicom

EBITA in the quarter amounted to $707.6 million, up 6.7% from the year-ago quarter. The EBITA margin was 16.4%, increasing 10 basis points (bps) on a year-over-year basis. The operating profit of $685.3 million increased 6% year over year. The operating margin remained flat at 15.9%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

VGM Scores

Currently, Omnicom has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Omnicom has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Omnicom Group Inc. (OMC) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research