On Tuesday, Truist Securities maintained its Buy rating on shares of IAC/InterActiveCorp (NASDAQ:IAC), with a steadfast price target of $88.00. The firm anticipates IAC to deliver third-quarter 2024 results that align with current subdued expectations.
The forecast is based on two primary factors: significant operational improvements within its Dotdash Meredith (NYSE:MDP) (DDM) segment and the ongoing challenges faced by ANGI Homeservices (NASDAQ:ANGI).
The DDM segment is expected to demonstrate progress, catching up to the double-digit growth rate of the digital advertising market and showing signs of margin enhancement. This improvement is a key aspect of the company's performance, as DDM has been a focal point for growth within IAC's portfolio.
Concurrently, ANGI Homeservices is undergoing a strategic shift, focusing on acquiring fewer but higher quality customers. This repositioning is aimed at delivering better cost controls. Although ANGI is anticipated to remain a work-in-progress throughout much of 2025, Truist Securities sees potential in the stock.
The analyst from Truist Securities emphasized the undervalued nature of IAC's stock, stating that the current market valuation does not accurately reflect the intrinsic value of IAC's diverse asset portfolio. Moreover, the company's substantial cash position, which could be utilized for stock buybacks or mergers and acquisitions, is seen as a positive driver for future growth and value creation.
IAC/InterActiveCorp, a media and internet company, is composed of a collection of brands and businesses that aim to provide services and entertainment to a wide array of customers. The company's portfolio includes various online and media services, and it has historically been active in seeking strategic acquisitions to bolster its market presence.
In other recent news, IAC/InterActiveCorp reported significant growth in its programmatic advertising rates during the second quarter earnings call, with a 36% increase for its Dotdash Meredith (DDM) segment. The corporation is actively exploring merger and acquisition opportunities, holding stakes in MGM and Turo.
However, Angi Inc., a subsidiary of IAC, anticipates a revenue decline of approximately 15% in Q3, although it projects over $30 million in adjusted EBITDA. Recently, KeyBanc Capital Markets adjusted its outlook on IAC, reducing the price target to $66 from the previous $67, while maintaining an Overweight rating.
Furthermore, Match Group (NASDAQ:MTCH) announced the appointment of Sean Edgett as its new Chief Legal Officer & Secretary. Edgett, with his extensive legal background and strategic vision, is expected to strengthen Match Group's legal framework and contribute to the company's growth and leadership in the industry. These are the recent developments for both IAC/InterActiveCorp and Match Group.
InvestingPro Insights
Recent data from InvestingPro adds depth to Truist Securities' analysis of IAC/InterActiveCorp. Despite the firm's optimistic Buy rating, InvestingPro Tips reveal some challenges ahead. Analysts anticipate a sales decline in the current year, and net income is expected to drop. This aligns with Truist's observation of ANGI Homeservices' ongoing challenges and the work-in-progress nature of its strategic shift.
However, IAC's financial position shows resilience. InvestingPro data indicates that the company's liquid assets exceed short-term obligations, and it operates with a moderate level of debt. This supports Truist's view on IAC's substantial cash position as a potential driver for future growth through stock buybacks or acquisitions.
The market seems to recognize IAC's potential, with the stock's Price to Book ratio at 0.74, suggesting it may be undervalued – echoing Truist's sentiment. Moreover, IAC's 1-year price total return of 22.99% indicates positive momentum, despite recent short-term declines.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for IAC, providing a deeper understanding of the company's financial health and market position.
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