IAC Inc. Just Reported A Surprise Profit And Analysts Updated Their Estimates

It's been a good week for IAC Inc. (NASDAQ:IAC) shareholders, because the company has just released its latest yearly results, and the shares gained 2.7% to US$54.04. 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. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out 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. Earnings are expected to tip over into lossmaking territory, with the analysts forecasting statutory losses of -US$0.61 per share in 2024. Before this latest report, the consensus had been expecting revenues of US$4.39b and US$0.61 per share in losses.

The consensus price target was broadly unchanged at US$76.01, implying that the business is performing roughly in line with expectations, despite a downwards adjustment to forecast revenue next year. 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. Currently, the most bullish analyst values IAC at US$128 per share, while the most bearish prices it at US$60.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 1.7% annualised decline to the end of 2024. That is a notable change from historical 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. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - IAC is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$76.01, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple IAC analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - IAC has 2 warning signs (and 1 which doesn't sit too well with us) we think 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.