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Earnings Beat: IAC Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

It's been a good week for IAC Inc. (NASDAQ:IAC) shareholders, because the company has just released its latest first-quarter results, and the shares gained 2.6% to US$55.07. It looks like a credible result overall - although revenues of US$930m were what the analysts expected, IAC surprised by delivering a statutory profit of US$0.51 per share, instead of the previously forecast loss. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on IAC after the latest results.

View our latest analysis for IAC

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After the latest results, the consensus from IAC's ten analysts is for revenues of US$3.80b in 2024, which would reflect a not inconsiderable 9.7% decline in revenue compared to the last year of performance. Losses are forecast to balloon 44% to US$1.74 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$3.96b and losses of US$1.75 per share in 2024.

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There was no real change to the average price target of US$74.42, suggesting that the revisions to revenue estimates are not expected to have a long-term impact on IAC's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on IAC, with the most bullish analyst valuing it at US$110 and the most bearish at US$63.00 per share. 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 13% by the end of 2024. This indicates a significant reduction from annual growth of 12% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 10% 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for IAC going out to 2026, and you can see them free on our platform here..

You can also view our analysis of IAC's balance sheet, and whether we think IAC is carrying too much debt, for free on our platform here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.