On Tuesday, Wells Fargo (NYSE:WFC) made a positive adjustment to its outlook on IAC/InterActiveCorp (NASDAQ:IAC), raising the price target to $84.00 from the previous $82.00. The firm maintained its Overweight rating on the company's shares. The revision reflects a more favorable view of the company's recent performance and future prospects.
IAC's subsidiary, ANGI (NASDAQ:ANGI), reported a year-over-year revenue decline of 13%, an improvement over the 16% decrease observed in the fourth quarter. The Ads & Leads segment experienced a 15% drop in revenue year-over-year, totaling $250 million, while the Services segment saw a more significant decline of 28% year-over-year, bringing in $21 million.
Despite the overall decrease in monetized transactions, which fell by 15% year-over-year, there was a notable increase of 24% in monetized transactions per service request, indicating an uptick in service provider acceptance rates and lead quality.
Service provider retention rates at 26 weeks also showed a significant year-over-year increase of 24%. International revenue climbed by 18% year-over-year to $35 million. The company's EBITDA was reported at $36 million, marking a 21% year-over-year increase excluding items, and outperforming Wall Street expectations by 16%.
Looking forward, IAC has maintained its full-year 2024 EBITDA guidance in the range of $120-150 million. The midpoint of this guidance represents a 9% increase over the pre-announcement average estimate of $124 million by analysts.
Wells Fargo's commentary highlighted expectations that the new CEO, Jeff Kip, will apply a successful international strategy to the U.S. market, potentially driving further growth for the company.
InvestingPro Insights
Wells Fargo's recent upbeat assessment of IAC/InterActiveCorp (NASDAQ:IAC) is just one facet of the company's financial landscape. According to real-time data from InvestingPro, IAC's market capitalization stands at $4.85 billion, with a Price/Book ratio of 0.79 as of Q1 2024, suggesting that the company's stock might be undervalued compared to its net asset value. Despite analysts' concerns about a potential sales decline and a drop in net income for the current year, IAC has shown a strong return over the last month, with a 16.85% increase in stock price, indicating a potential rebound or market optimism.
InvestingPro Tips highlight that IAC operates with a moderate level of debt and possesses liquid assets that exceed its short-term obligations, providing financial stability. However, the company is not expected to be profitable within the year and does not pay a dividend, which might be a consideration for income-focused investors. For those interested in a deeper dive into IAC's financial health and future prospects, InvestingPro offers more than 8 additional tips on their platform. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and gain access to comprehensive analyses that could guide investment decisions.
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