Results: IAC Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates
Investors in IAC Inc. (NASDAQ:IAC) had a good week, as its shares rose 2.7% to close at US$54.04 following the release of its annual results. It looks like a credible result overall - although revenues of US$4.4b were what the analysts expected, IAC surprised by delivering a statutory profit of US$2.97 per share, instead of the previously forecast loss. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for IAC
Following last week's earnings report, IAC's 14 analysts are forecasting 2024 revenues to be US$4.29b, approximately in line with the last 12 months. The company is forecast to report a statutory loss of US$0.61 in 2024, a sharp decline from a profit over the last year. Before this latest report, the consensus had been expecting revenues of US$4.39b and US$0.61 per share in losses.
There was no real change to the average price target of US$76.01, suggesting that the revisions to revenue estimates are not expected to have a long-term impact on IAC's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic IAC analyst has a price target of US$128 per share, while the most pessimistic values it at US$60.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the IAC's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 1.7% by the end of 2024. This indicates a significant reduction from annual growth of 17% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 9.9% per year. It's pretty clear that IAC's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple IAC analysts - going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 2 warning signs for IAC (of which 1 is concerning!) you should know about.
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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.
