Investors in IAC (NASDAQ:IAC) from a year ago are still down 17%, even after 7.2% gain this past week
While it may not be enough for some shareholders, we think it is good to see the IAC Inc. (NASDAQ:IAC) share price up 26% in a single quarter. But that is minimal compensation for the share price under-performance over the last year. In fact, the price has declined 17% in a year, falling short of the returns you could get by investing in an index fund.
On a more encouraging note the company has added US$363m to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.
See our latest analysis for IAC
Because IAC made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
IAC grew its revenue by 18% over the last year. We think that is pretty nice growth. Unfortunately that wasn't good enough to stop the share price dropping 17%. This implies the market was expecting better growth. However, that's in the past now, and it's the future that matters most.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. If you are thinking of buying or selling IAC stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
While IAC shareholders are down 17% for the year, the market itself is up 21%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. It's great to see a nice little 26% rebound in the last three months. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). If you want to research this stock further, the data on insider buying is an obvious place to start. You can click here to see who has been buying shares - and the price they paid.
IAC is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American 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.
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