Vimeo, Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

Vimeo, Inc. (NASDAQ:VMEO) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It looks like a credible result overall - although revenues of US$417m were what the analysts expected, Vimeo surprised by delivering a (statutory) profit of US$0.13 per share, an impressive 66% above what was forecast. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Vimeo

After the latest results, the consensus from Vimeo's six analysts is for revenues of US$396.1m in 2024, which would reflect a discernible 5.1% decline in revenue compared to the last year of performance. Statutory earnings per share are forecast to nosedive 97% to US$0.0038 in the same period. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$418.9m and losses of US$0.083 per share in 2024. Although the analysts have reduced their revenue expectations, they now expect the business to reach profitability sooner than previously assumed, which makes it look as though there's been a pretty serious improvement in sentiment following the latest results.

The analysts have cut their price target 8.5% to US$5.40per share, suggesting that the declining revenue was a more crucial indicator than the expected improvement in earnings. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Vimeo analyst has a price target of US$7.00 per share, while the most pessimistic values it at US$4.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 5.1% annualised decline to the end of 2024. That is a notable change from historical growth of 11% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 9.9% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Vimeo is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that there's been a clear step-change in belief around the business' prospects, with the analysts now expecting Vimeo to become profitable next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, long term profitability is more important for the value creation process. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Vimeo. Long-term earnings power is much more important than next year's profits. We have forecasts for Vimeo going out to 2026, and you can see them free on our platform here.

You can also see our analysis of Vimeo's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.