Update shared on 20 Nov 2025
Fair value Decreased 5.72%Analysts have lowered their price target on IAC by $2 to $39, citing ongoing operational challenges highlighted in recent quarterly results. However, they note that cost-cutting efforts and asset support are helping to limit further downside risk.
Analyst Commentary
Following IAC's latest quarterly performance and subsequent adjustment of its price target, equity research commentary reflects a balanced view of the company's prospects. Analysts have identified both positive and negative factors influencing the stock's valuation and outlook.
Bullish Takeaways
- Ongoing cost reduction initiatives are seen as constructive. These efforts are helping to protect margins and potentially boost future profitability.
- The company's stake in MGM is viewed as a strategic asset. This holding offers underlying support to IAC's valuation and may help limit further downside risk.
- Actions by management to address operational inefficiencies suggest a proactive approach, which could yield longer-term improvements in execution.
- Shareholder-friendly moves, such as reallocating resources or reducing expenses, indicate a focus on optimizing capital deployment.
Bearish Takeaways
- Recent quarters have exposed operational challenges, particularly within specific segments like People and Care.com. This has raised concerns about execution and near-term growth.
- The reduction in price target reflects uncertainty in achieving consistent earnings results, which could impact investor confidence.
- Despite asset support, analysts remain cautious about immediate upside and cite ongoing business headwinds as well as the need for further clarity in operational turnaround.
What's in the News
- IAC completed a new tranche of its share buyback program, repurchasing 2,766,564 shares for $100.01 million between July 1, 2025 and October 31, 2025. This represents 3.46% of outstanding shares (Key Developments).
- The company has now bought back a total of 11,604,688 shares for $550.97 million under the buyback initiative originally announced on August 10, 2020. This amounts to 13.63% of its shares (Key Developments).
Valuation Changes
- Fair Value Estimate has decreased moderately from $48.38 to $45.62, reflecting heightened near-term risks.
- Discount Rate has risen slightly from 9.25% to 9.77%, indicating analysts perceive increased risk in the company's cash flows.
- Revenue Growth projections have marginally declined further and shifted from -12.49% to -12.75%.
- Net Profit Margin expectations have improved and moved up from 3.43% to 3.98%.
- Future P/E Ratio forecast has dropped from 47.36x to 38.73x, suggesting expectations for lower future earnings multiples.
Disclaimer
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