All-in-one video software solution Vimeo (NASDAQ:VMEO) stock is attempting to bottom out after being spun off from parent IAC/InterActiveCorp (NASDAQ:IAC). The Company was spun off from its parent in May 2021 and shares have since fallen sharply from a high of $57.88 to a low of $29.31.
The company focuses on enterprise customers as it has over 5,200 paying enterprise clients. The Vimeo Video Library was launched in Q2 2021 specifically for training videos as well as a free recording software—Vimeo Record.
Vimeo enabled companies to embed their logos and branding with over 1.6 million subscribers. The Company is a post-pandemic niche player in the enterprise streaming segment. The acceleration of COVID-19 vaccination are returning workers to offices as well as bolstering elastic offices and hybrid versions. With double-digit revenue growth, prudent investors seeking exposure in the reopening and return to work trend can watch for opportunistic pullbacks.
Q2 FY 2021 Earnings Release
On Aug. 8, 2021, Vimeo released its second-quarter fiscal 2021 results for the quarter ending June 2021. The Company reported an adjusted earnings-per-share (EPS) loss of (-$0.13). Revenues grew 43% year-over-year (YoY) to $96.05 million. Cash flow from operating activities was $18.2 million and free cash flow was $18.1 million ending the quarter with $331 million in cash and cash equivalents.
Vimeo CEO Anjali Sud commented,
“The evolution of video as the new way to work continues. In the second quarter we gained momentum in the enterprise with expanded product breadth, as we enhanced our all-in-one software solution to enable every employee to be a content creator and every business to be video-first. Our execution is on track and we are investing strategically to position Vimeo as a long-term winner in this large and early market.”
Conference Call Takeaways
CEO Sud set the tone,
“We've just reported our first quarter as an independent company. I want to welcome all our new shareholders, thank our over 230 million users globally and give a virtual high five to the now 950 Vimeo employees who served these users with passion and care.18 months into COVID-19, the demand for business video continues at an elevated level.
"Employees no longer differentiate between consuming content at work or at home. And as a result, organizations are increasingly planning for a future that is video-first, no matter where they're located. We've long believed that any business with a website, social media account, online store or distributed team will use professional quality video the same way they use e-mail, chat, image, or text today.”
Product Launches
Sud continued,
“Our most recent launch here was Vimeo Record, a free screen recording tool that saw usage increase over 80% quarter-over-quarter. Screen recordings now account for nearly 10% of total uploads to Vimeo. We also continue to invest in partnerships. We recently announced new partnerships and native integrations with Asana (NYSE:ASAN) and TikTok and have expanded our existing partnerships with Facebook (NASDAQ:FB), Shopify (NYSE:SHOP) and GoDaddy (NYSE:GDDY).
"We expect to launch more native integrations this year that bring the power of Vimeo directly to other platforms. This not only allows us to diversify user acquisition, but it also gives Vimeo users more choice, more reach, and more utility across the Internet. In our enterprise business, we made significant strides in expanding our product breadth to serve more video use cases across an organization.
"This quarter, we launched Video Library, a centralized hub for employees to share and access knowledge across teams. All videos are automatically transcribed, searchable and can be organized by department or team with enterprise-level permissioning, and security. Our goal is for Video Library to eventually become the system of record for all video in the enterprise, from executive comms and internal collaboration to marketing, training, and development.”
Enterprise Development
CEO Sud concluded,
“For the rest of the year, we're building out many more enterprise features from webinar capabilities to new event experiences to deeper analytics to serve the world's largest companies. Our road map is designed to increase employee, team, and customer engagement and to bring Vimeo closer to existing and emerging business workflows.
"We're relentlessly pushing our pace of innovation and working closely with our customers as we build. We also continue to benefit from a self-propelling funnel. Our free and self-serve users drove nearly 70% of new enterprise customers in the quarter. And we're still very early in developing repeatable motions for identifying and converting such customers, so plenty of untapped potential.”
VMEO Opportunistic Pullback Price Levels
Using the rifle charts on the weekly and daily time frames provides a precision view of the landscape for VMEO stock. Since shares are relatively new, it will take more time for the wider time frame weekly and monthly charts to materialize. We will utilize the weekly since the basic trend line indicators are working.
The weekly rifle chart topped out at the $57.88 Fibonacci (fib) level before shares came tumbling to $29.31 fib lows before coiling. The weekly 5-period moving average (MA) is flat at $36.69 while the weekly 15-period MA is still falling diagonally at $35.67. This sets up a potential pup breakdown pattern as the stochastic continues to fall lower.
The daily rifle chart formed a market structure high (MSH) sell trigger on the breakdown under the $38 trigger. The daily 5-period MA has been falling at $32.69 as the daily stochastic completed a full oscillation down. The daily stochastic is trying to defend the daily market structure low (MSL) trigger at $31.70. The daily stochastic is attempting a 10-band mini pup with daily lower BBs falling under the $29.70 fib.
Prudent investors can look for opportunistic pullbacks at the $32.18 fib, $29.31 fib, $27.48, $25.50, $22.59, $20.14, and the $19.61 sticky fives’ level. Upside trajectories range from the $41.61 fib up to the $60.75 fib.