On Friday, TD Cowen maintained its positive stance on IAC/InterActiveCorp (NASDAQ:IAC), reiterating a Buy rating and a $78.00 price target. The firm's assessment followed a discussion with IAC's CFO & COO, Chris Halpin, during the '24 TMT Conference. Key topics of the conversation included the revenue trajectory of Dotdash Meredith (NYSE:MDP), effects of the new OpenAI partnership, Dotdash Meredith's profitability, and expectations from ANGI's new CEO.
IAC's current trading metrics were highlighted, with shares valued at 3.8 times enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA), excluding figures from ANGI, MGM, and other investments. TD Cowen views this as an attractive valuation, which underpins their decision to maintain the $78 price target.
The discussion at the '24 TMT Conference provided insights into various aspects of IAC's operations. The Dotdash Meredith segment's revenue trajectory was a focal point, indicating the company's direction in content and digital media. Additionally, the impact of IAC's recent partnership with OpenAI was addressed, although specific details of the partnership's effects were not disclosed in the context provided.
The conversation also touched on the profitability of Dotdash Meredith (DDM), a key component of IAC's portfolio. While the exact figures and strategies for improving DDM's profitability were not shared, it remains a point of interest for investors and analysts following the company.
Lastly, the introduction of a new CEO at ANGI, one of IAC's businesses, was discussed along with the financial expectations set forth for the company's leadership. The change in leadership and the company's financial outlook are likely to be influential factors in IAC's future performance.
In conclusion, TD Cowen's continued endorsement of IAC reflects an optimistic outlook on the company's value and its strategic initiatives, including partnerships and leadership changes. The firm's maintained price target suggests confidence in IAC's potential for growth and profitability.
In other recent news, IAC/InterActiveCorp has been in the spotlight following adjustments in stock targets by two major firms, Wells Fargo and KeyBanc, both maintaining an Overweight rating. Wells Fargo raised its price target from $82.00 to $84.00, reflecting a positive outlook on IAC's performance and future prospects. KeyBanc also raised the price target on IAC's stock to $67 from the previous $64, highlighting the performance of Dotdash Meredith as a key factor in IAC's ongoing turnaround.
IAC's subsidiary, ANGI, reported a year-over-year revenue decline of 13%, with the Ads & Leads segment experiencing a 15% drop in revenue. Despite the overall decrease in monetized transactions, there was a notable increase of 24% in monetized transactions per service request. The company's EBITDA was reported at $36 million, marking a 21% year-over-year increase, outperforming Wall Street expectations by 16%.
In terms of future prospects, IAC has maintained its full-year 2024 EBITDA guidance in the range of $120-150 million. Wells Fargo's commentary highlighted expectations that the new CEO, Jeff Kip, will apply a successful international strategy to the U.S. market, potentially driving further growth for the company.
InvestingPro Insights
TD Cowen's optimistic outlook on IAC/InterActiveCorp is further informed by key financial metrics and analyst perspectives available through InvestingPro. IAC's market capitalization stands at a robust $4.28 billion, reflecting its substantial presence in the market. Despite a challenging revenue trajectory with a decline of 15.69% over the last twelve months as of Q1 2024, IAC's gross profit margin remains high at 69.8%, showcasing the company's ability to maintain profitability in core operations.
InvestingPro Tips highlight IAC's high shareholder yield and a moderate level of debt, which could be attractive to investors seeking companies with a sound financial structure. Additionally, while the company has not been profitable over the last twelve months, analysts predict that IAC will return to profitability this year. These insights, combined with a low revenue valuation multiple, may present a compelling case for potential investors.
For those looking to delve deeper into IAC's financials and future prospects, InvestingPro offers a comprehensive list of additional tips. Use coupon code PRONEW24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and gain access to valuable insights that could guide your investment decisions.
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