IAC/InterActiveCorp (NASDAQ:IAC) shareholders are still up 19% over 1 year despite pulling back 6.4% in the past week
The simplest way to benefit from a rising market is to buy an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. That downside risk was realized by IAC/InterActiveCorp (NASDAQ:IAC) shareholders over the last year, as the share price declined 21%. That contrasts poorly with the market return of 21%. IAC/InterActiveCorp may have better days ahead, of course; we've only looked at a one year period.
After losing 6.4% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.
Check out our latest analysis for IAC/InterActiveCorp
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
During the last year IAC/InterActiveCorp grew its earnings per share, moving from a loss to a profit.
When a company has just transitioned to profitability, earnings per share growth is not always the best way to look at the share price action. So it makes sense to check out some other factors.
IAC/InterActiveCorp managed to grow revenue over the last year, which is usually a real positive. Since we can't easily explain the share price movement based on these metrics, it might be worth considering how market sentiment has changed towards the stock.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
IAC/InterActiveCorp is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. So it makes a lot of sense to check out what analysts think IAC/InterActiveCorp will earn in the future (free analyst consensus estimates)
What about the Total Shareholder Return (TSR)?
Investors should note that there's a difference between IAC/InterActiveCorp's total shareholder return (TSR) and its share price change, which we've covered above. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. We note that IAC/InterActiveCorp's TSR, at 19% is higher than its share price return of -21%. When you consider it hasn't been paying a dividend, this data suggests shareholders have benefitted from a spin-off, or had the opportunity to acquire attractively priced shares in a discounted capital raising.
A Different Perspective
IAC/InterActiveCorp shareholders have gained 19% over twelve months, which isn't far from the market return of 21%. However, the share price has actually dropped 9.9% over the last three months. It may simply be that the share price got ahead of itself, although you might want to check for any weak results. It's always interesting to track share price performance over the longer term. But to understand IAC/InterActiveCorp better, we need to consider many other factors. For instance, we've identified 4 warning signs for IAC/InterActiveCorp (2 are a bit concerning) that you should be aware of.
But note: IAC/InterActiveCorp may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
