IAC/InterActiveCorp (NASDAQ:IAC): Earnings Expected To Remain Subdued
In December 2017, IAC/InterActiveCorp (NASDAQ:IAC) announced its latest earnings update. Overall, analyst consensus outlook appear pessimistic, with profits predicted to drop by -3.88% next year. Though this outlook is not unfounded, given the negative earnings growth rate over the past five years on average. With net income at current levels of US$304.92M, the consensus growth rate suggests that earnings will decline to US$293.08M by 2019. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for IAC/InterActiveCorp in the longer term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here. See our latest analysis for IAC/InterActiveCorp
How is IAC/InterActiveCorp going to perform in the near future?
The 19 analysts covering IAC view its longer term outlook with a positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for IAC, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
From the current net income level of US$304.92M and the final forecast of US$619.47M by 2021, the annual rate of growth for IAC’s earnings is 21.01%. This leads to an EPS of $6.55 in the final year of projections relative to the current EPS of $3.81. Earnings growth appears to be a result of reduction in costs rather than purely top-line expansion as earnings is increasing at a faster rate. Margins is currently sitting at 9.22%, which is expected to expand to 12.35% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For IAC/InterActiveCorp, I’ve compiled three pertinent factors you should further examine:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is IAC/InterActiveCorp worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether IAC/InterActiveCorp is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of IAC/InterActiveCorp? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
