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IAC/InterActiveCorp Message Board

  • investora2z investora2z Jul 20, 2013 10:34 AM Flag

    Earnings will be an important trigger

    The last few months have been good for the stock as it has appreciated by around 26% over 6 months. Compared to the 52 week low in January, it has appreciated by 36%. The long term growth story in the stock has been good, though there was some volatility in the second half of 2012. The fundamentals have been improving steadily, and the revenues and net income have grown significantly over the past few years. Revenues have increased manifold from 2009, and the company has been reporting profits since 2010. However, the recent rise in the stock has stretched the valuations as the trailing P/E is around 27. The forward P/E is much lower (11.30), which indicates that the market expects good growth over the next few quarters. The PEG ratio is also very low at 0.44, which indicates good growth expectations over the next 5 years. The price to sales is 1.52, and the price to book ratio is 2.69. So the expectations are high, and the valuations may get a bit uncomfortable if the stock price rises further. The company will have to keep up the good fundamental growth story, and slippages may lead to a correction or increase in volatility. It has been focusing on new segments for long term growth. IACI invested in DraftStreet keeping in mind the future potential of the fantasy sports segment. This fast growing segment is attracting investments from companies like Yahoo (YHOO), Comcast (CMCSA) and MGT Capital Investments (MGT). Recently, Electus, an operating business of IAC signed a first look deal with Caracol Television. In the last quarter, there was good yoy growth in revenues and net income. If the fundamentals continue to support, the next few months can be even better for the stock. Earnings will be an important trigger.

58.71+0.38(+0.65%)Aug 31 4:00 PMEDT