On Friday, an analyst from KeyBanc adjusted the stock price target for IAC/InterActiveCorp (NASDAQ: NASDAQ:IAC), bringing it down to $64 from the previous $72, while still keeping an Overweight rating on the stock. The revision reflects a more cautious valuation of Angi, a subsidiary of IAC, with its own target being reduced based on peer multiples.
The analyst anticipates a positive tone in the upcoming earnings report from IAC, citing several factors that could contribute to a strong performance.
A rebounding advertising market is expected to benefit Dotdash Meredith (NYSE:MDP), suggesting that the full-year EBITDA target of $280 million to $300 million could be surpassed. Moreover, improvements in Angi's profitability, particularly with the appointment of a full-time CEO, are likely to have a positive impact.
IAC's CEO, Joey Levin, is now in a position to assess the broader portfolio of the company, which could lead to strategic moves that benefit the firm. Based on these assessments, KeyBanc has slightly increased its EBITDA estimates for IAC for the years 2024 and 2025, indicating a growing confidence in Dotdash Meredith's recovery trajectory.
Despite the bullish outlook on IAC's operations, the stock price target for Angi was lowered to $3.25, which is based on a 10x multiple of the estimated 2025 enterprise value to EBITDA. This new valuation for Angi has influenced the overall price target reduction for IAC. Nevertheless, the Overweight rating suggests that KeyBanc continues to see IAC as a stock with potential for growth.
InvestingPro Insights
Following the recent price target adjustment by KeyBanc for IAC/InterActiveCorp (NASDAQ: IAC), InvestingPro data and tips provide additional context for investors. The company is currently trading at a P/E ratio of 17.6, which is considered low relative to its near-term earnings growth potential. This aligns with the analyst's positive outlook on IAC's upcoming earnings report and the expected benefits from a rebounding advertising market on Dotdash Meredith.
InvestingPro data also highlights a significant return over the last week, with a 10.37% increase in the stock price, which may indicate a positive investor sentiment leading up to the earnings report. Moreover, IAC's liquid assets surpass its short-term obligations, suggesting a strong liquidity position that could support strategic moves and portfolio assessments mentioned by CEO Joey Levin.
While analysts anticipate a sales decline in the current year and do not expect the company to be profitable this year, the InvestingPro fair value estimate stands at $71.2 USD, higher than the analyst target, implying potential upside.
For a deeper analysis and more InvestingPro Tips, including the company's moderate level of debt and profitability over the last twelve months, interested readers can visit https://www.investing.com/pro/IAC. To access additional insights, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With 8 more InvestingPro Tips available, investors can gain a comprehensive understanding of IAC's financial health and future prospects.
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