Slower than expected pace of growth in top-line led to a sell-off in the stock. It has recovered, but the weakness is not over. The valuations are better after the fall. However, some analysts have expressed doubts about the future performance of the company. One article on seekingalpha was particularly negative about the prospects, and the author predicted lower earnings in 2014. The analyst predicted revenue growth to be between 0-6% next year as headwinds from mobile and a less-friendly search algorithm continue. He expects the EPS to come in between $3.85 and $4.05. In the last quarter, there was 6% yoy growth in revenues, though there was a 5% sequential decline. The EPS came in much better than estimates as the net income increased by 138% on a yoy basis. Even the sequential growth was significant. The article mentioned that IAC is generating less revenue per eyeball, indicating less than optimal monetizing of the consumer base. IAC's websites are not that suited for viewing through mobile devices yet, and hence monetizing may not be optimal. The recent change in fortunes of Facebook are primarily based in increased confidence in its ability to leverage the transition to mobile devices. IAC's dependence on Google may hurt its growth prospects because Google may continue to update its algorithm to the disadvantage of others. However, considering the good performance of IAC over the years, one cannot underestimate its ability to improve its performance. Increased use of internet through mobile devices can also be viewed as growth opportunity. IAC's investments into emerging growth segments may help improve growth in the long term. It invested in fantasy sports where Yahoo (YHOO), Comcast (CMCSA) and MGT Capital Investments (MGT) have put in their money. So while analysts may turn negative, one can remain cautiously optimistic. Performance over the next couple of quarters needs to be watched carefully.
Earnings will be released on July 31. That will be an important trigger for IACI. In the last quarter, revenues had increased by ~16% and the net income had gone up by 55% on yoy basis. However, the revenues had declined by 3% sequentially. The stock has already appreciated by 37% from the 52 week low in January, and it is important that the fundamentals catch up quickly. The earnings need to deliver positive surprises, otherwise there may be a bit of correction. The recent rise in the stock has stretched the valuations a bit as the trailing P/E is now around 27. The forward P/E is around 11 and the PEG is 0.44, which indicates that there are expectations of good growth in the net income over the next few quarters / years. Since the expectations are high, there is little room for slippages. Going by the recent track record of the company, the fundamental growth story is likely to continue. The revenues have doubled since 2009, and the bottomline has improved significantly. In 2009, the revenues were $1.35 billion, while in 2012, the company recorded a revenue of $2.8 billion. In 2009 the company posted a net loss of $978 million, while it recorded a profit of $159 million in 2012. Future growth may come from new segments/ businesses, and the company can be expected to foray into new arenas. It has recently invested in DraftStreet which is involved in daily fantasy sports. This segment is likely to show tremendous growth over the next few years, and several big and small players, like Yahoo (YHOO), Comcast (CMCSA) and MGT Capital Investments (MGT), have invested in fantasy sports recently. Comcast has invested $11 million in Fanduel.com and MGT has invested in Fanthrowdown.com. If IACI delivers a good set of numbers, the recent up trend in the stock may gain strength.
Though it is up only 7% on a 52 week basis, it has shown a good 20% appreciation from its 52 week low made in January. So the short term investors may not be complaining. Even on a longer term, the stock has tripled since May-June 2009. The revenue growth has been good, and the company has done well on the net income recently. In the last quarter, the revenues had grown by 15% and the net income had increased by 55%. It recently ventured into the daily fantasy sports by investing in DraftStreet, a smaller company engaged in the shorter version of the game. The daily fantasy sports wagering segment is picking up fast with smaller players like MGT Capital Investments (MGT) committing funds. Bigger players like Yahoo (YHOO) and Comcast (CMCSA) have also invested money. Comcast invested $11 million in Fanduel.com through its venture capital arm. MGT has invested in Fanthrowdown.com, which is more focused on the daily segment. The concept of instant gratification in the shorter version is catching up, and is expected to show exponential growth over the next few years. DraftStreet had already got funding from Atlas Ventures recently. IACI will surely benefit from the growth story as it has entered at the initial stages. As per estimates, on an average a site takes 10% cut in the prize money. However, the benefits may be visible over the longer term as the exposure taken by IACI is indirect. The forward P/E of 10 (fye 2014) and PEG of 0.39 do indicate that the valuations remain reasonable, and there is expectation of growth over the next few years. If the fundamentals support, the growth in stock may be better in 2013. Of course, the underlying assumption is that the market will remain sensible and there are no negative surprises from the company.
~ Wednesday! $IACI ~ Q1 Earnings posted, pending or coming soon! In Charts and Links Below!
~ $IACI ~ Earnings expected on Wednesday * Want more like this? Search Keyword:MACMONEY >>> http://tinyurl.com/MACMONEY <<< One or more of many earnings sites has alerted this security has or will be posting earnings on or around the day of this message.
~ $IACI ~ Earnings posted, pending or coming soon! In Charts and Links Below!
~ $IACI ~ Earnings expected on Wednesday * This Week In Earnings: Earnings are coming or are already posted! This is what the charts look like! If you play the earnings these posts can be very helpful to you! Want more like this? Search Keyword:MACMONEY >>> http://tinyurl.com/MACMONEY <<< One or more of many earnings sites has alerted this security has or will be posting earnings on or around the day of this message.
This is getting me excited along with the google agreement..They are setting up to have a much higher PPS IMO! IAC repurchased 8 million shares of common stock at an average price of $27.54 between July 31, 2007 and October 26, 2007. Year-to-date, IAC has repurchased 15.6 million shares of common stock for approximately $0.5 billion. IAC has 50.8 million shares remaining in its stock repurchase authorization.
IAC/InterActiveCorp operates a portfolio of brands in the travel, retailing, ticketing, personals, media, financial services, real estate, and teleservices industries worldwide. Its Travel segment makes travel products and services available from various commercial and charter airlines, lodging properties, car rental companies, and cruise lines and in-destination service providers. The company’s Electronic Retailing segment sells consumer products primarily through the HSN and America's Store television networks, and HSN.com, as well as through consumer catalog services and infomercials. IAC/InterActiveCorp’s Ticketing segment provides online and offline ticketing services through Ticketmaster-owned Web sites. It also offers operator-staffed call centers and independent retail outlets serving various venues, entertainment facilities, promoters, and professional sports franchises. Its Personals segment provides single adults with an environment for meeting other singles through their respective Web sites, as well as through Match.com's affiliated networks. The company’s Local and Media Services segment offers local content for major cities in the United States and abroad, as well as practical transactional tools; markets coupon books, discounts, merchant promotions, and sally foster gift wrap; and offers free online invitation services, and online travel search engine and directory. Its Financial Services and Real Estate segment provides online exchanges that connect consumers and service providers in the lending and real estate industries. IAC/InterActiveCorp’s Teleservices segment provides outsourced customer lifecycle management solutions. The company was incorporated as Silver King Broadcasting Company, Inc. in 1986 and changed its name to HSN, Inc. in 1996. It further changed its name to USA Networks, Inc. in 1998; to USA Interactive in 2002; to InterActiveCorp in 2003; and to IAC/InterActiveCorp in 2004. The company is based in New York City.
Stock Price History
52-Week Change3: -40.43%
S&P500 52-Week Change3: 4.70%
52-Week High (02-Aug-05)3: 55.50
52-Week Low (30-Aug-05)3: 23.49
50-Day Moving Average3: 28.84
200-Day Moving Average3: 28.41
Average Volume (3 month)3: 2,287,580
Average Volume (10 day)3: 3,179,640
Shares Outstanding: 319.38M
% Held by Insiders4: 22.00%
% Held by Institutions4: 82.70%
Shares Short (as of 10-Jan-06)3: 16.37M
Short Ratio (as of 10-Jan-06)3: 7.8
Short % of Float (as of 10-Jan-06)3: 5.20%
Shares Short (prior month)3: 14.80M
Dividends & Splits
Forward Annual Dividend Rate5: N/A
Forward Annual Dividend Yield5: N/A
Trailing Annual Dividend Rate3: N/A
Trailing Annual Dividend Yield3: NaN%
5 Year Average Dividend Yield5: N/A
Payout Ratio5: N/A
Dividend Date3: N/A
Ex-Dividend Date5: N/A
Last Split Factor (new per old)2: 1:2
Last Split Date3: 09-Aug-05