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1. Company Snapshot

1.a. Company Description

IAC/InterActiveCorp operates as a media and internet company worldwide.The company publishes original and engaging digital content in the form of articles, illustrations, and videos and images across entertainment, food, home, beauty, travel, health, family, luxury, and fashion areas; and magazines related to women and lifestyle.It also operates a digital marketplace that connects home service professionals with consumers for repairing, remodeling, cleaning, landscaping, maintenance, and enhancement services under the Angi Ads, Angi Leads, and Angi Services brands.


In addition, the company operates websites that offer general search services and information, including Ask.com, a search site with a variety of fresh and contemporary content; Reference.com that offers content across select vertical categories; Consumersearch.com, which offers content designed to simplify the product research process; and Shopping.net, a vertical shopping search site that contains a mix of search services and/or content targeted to various user or segment demographics, as well as offers direct-to-consumer downloadable desktop applications.Further, it offers Care.com, an online destination for families to connect with caregivers for their children, aging parents, pets, and homes; develops and provides subscription mobile applications across the communication, language, weather, business, health, and lifestyle verticals; a technology driven staffing platform for flexible W-2 work under the Bluecrew name; a platform to connect healthcare professionals with job opportunities under the Vivian Health name; The Daily Beast, a website dedicated to news, commentary, culture, and entertainment that publishes original reporting and opinion; and production and producer services for feature films for sale and distribution through theatrical releases and video-on-demand services.The company was formerly known as IAC HOLDINGS, INC.


IAC/InterActiveCorp is headquartered in New York, New York.

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1.b. Last Insights on IAC

IAC Inc.'s recent performance was driven by strong Q2 earnings, with a quarterly earnings beat of $2.57 per share, significantly surpassing the Zacks Consensus Estimate of a loss of $0.3 per share. The company's core profit rose 15% year-over-year, fueled by steady growth in its digital media segment and reduced operating expenses. A 20% stake in MGM, acquired in 2020, has been a value-creating move. Additionally, the company's subsidiary Dotdash Meredith, now rebranded as People Inc., has shown resilience in the publishing industry. IAC's strategic moves and financial management have positioned it well.

1.c. Company Highlights

2. IAC's Q4 Earnings: A Mixed Bag

IAC's fourth-quarter financial performance was marked by a mix of positive and negative trends. Revenue growth was driven by People's digital revenue, which rose 14% year-over-year, thanks to solid execution across advertising, performance marketing, and licensing. However, Care's revenue declined 9% due to softness in the Enterprise segment. The company's adjusted EBITDA was $19 million, generating 22% EBITDA margins. EPS came out at -$0.99, missing estimates of $0.67. The company's guidance for digital revenue and adjusted EBITDA growth is mid- to high single digits for the year.

Publication Date: Feb -09

📋 Highlights
  • People's Digital Revenue Growth: 14% increase driven by solid execution in Advertising, Performance Marketing, and Licensing.
  • Adjusted EBITDA Expansion: Digital segment grew 9% to $13 million in Print EBITDA, with 38% of digital revenue now non-session-based (37% YoY growth).
  • Care Revenue Decline: 9% quarterly drop due to Enterprise softness, though Consumer revenue remained stable with $19 million adjusted EBITDA (22% margin).
  • Buyback Activity: Share count reduced by 10% ($337 million spent) over 12 months, signaling confidence in long-term value.
  • Google Litigation Impact: $15 million annual litigation expenses expected, with CEO Barry Diller projecting "hundreds of millions" in potential damages recovery.

Segment Performance

People's digital revenue growth was driven by non-session-based revenue streams, which now comprise 38% of total digital revenue and grew 37% year-over-year. The company's brands remain strong, and advertisers are interested in them, both in new and traditional environments. Care's consumer revenue was steady, but Enterprise revenue was weak. The company's focus on off-platform audiences and execution against session-based businesses is expected to drive growth.

Valuation Metrics

To understand what's priced into IAC's stock, we can look at its valuation metrics. The company's P/S Ratio is 1.15, and EV/EBITDA is 15.12. The P/E Ratio is -26.58, indicating that the company is currently unprofitable on a trailing twelve-month basis. The P/B Ratio is 0.58, suggesting that the stock may be undervalued relative to its book value. With an ROE of -2.17% and ROIC of -1.47%, the company's profitability metrics are negative.

Guidance and Outlook

IAC expects digital revenue and adjusted EBITDA to grow mid- to high single digits for the year. The company is forecasting approximately $15 million in litigation expenses related to its Google Ad tech litigation. Barry Diller expressed optimism about People's growth, stating it's likely to exceed expectations due to its momentum and well-run machine. The company's guidance is conservative due to search disruptions, and analysts estimate next year's revenue growth at 0.5%.

Investment Thesis

IAC's investment thesis is centered around its People segment, which is driving growth through its digital revenue streams. The company's focus on off-platform audiences and execution against session-based businesses is expected to drive growth. However, the company's Care segment is facing challenges, and the outcome of the Google Ad tech litigation is uncertain. With a Net Debt / EBITDA ratio of 2.18, the company's leverage is moderate.

3. NewsRoom

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Is IAC Stock a Buy or Sell After Incline Global Liquidated Its Entire Stake Worth $15.4 Million?

00:40

Source: fool.com

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Aristeia Capital Bought Nearly 3 Million IAC Shares. Is the Stock a Buy?

Mar -04

Source: fool.com

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Pacific Avenue Capital Partners to Acquire IAC's Care.com

Mar -02

Source: prnewswire.com

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Barry Diller's IAC Is Near Deal to Sell Care.com

Mar -02

Source: wsj.com

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Diamond Hill Small-Mid Cap Fund Q4 2025 Portfolio Activity

Feb -27

Source: seekingalpha.com

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Meryllion Resources, Drilling Underway at Tasmanian IAC REE Project

Feb -19

Source: newsfilecorp.com

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Care.com and Headspace Partner to Tackle the Unsustainable Mental Load of Caregiving

Feb -18

Source: businesswire.com

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Brooktree Capital Management Has $9.97 Million Stock Position in IAC Inc. $IAC

Feb -16

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (0.30%)

6. Segments

Dotdash Meredith - Digital

Expected Growth: 0.5%

The digital publishing industry is experiencing moderate growth, driven by online advertising and subscription-based models. Dotdash Meredith's strong brand presence and diversified revenue streams position it for slightly higher growth than the global average.

Angi Inc - ADS and Leads

Expected Growth: 0.4%

The home services market is relatively stable, with steady demand for advertising and lead generation services. Angi Inc's established market presence and diversified service offerings support a growth rate slightly above the global average.

Search

Expected Growth: 0.2%

The online search market is highly competitive, with established players dominating the landscape. While the segment's revenue is largely driven by advertising, its growth is constrained by intense competition and market saturation.

Care.com

Expected Growth: 0.6%

The online care services market is growing, driven by increasing demand for caregiving services. Care.com's established market presence and expanding service offerings position it for higher growth than the global average.

Angi Inc - International

Expected Growth: 0.4%

The international home services market is relatively stable, with steady demand for advertising and lead generation services. Angi Inc's established international presence and diversified service offerings support a growth rate similar to its ADS and Leads segment.

Angi Inc. - Services

Expected Growth: 0.5%

The home services market is growing, driven by increasing demand for repair and maintenance services. Angi Inc's established market presence and expanding service offerings position it for moderate growth.

Emerging & Other

Expected Growth: 0.8%

Emerging businesses and investments are often characterized by higher growth potential, driven by innovation and expanding market opportunities. While the segment's growth is subject to various risks and uncertainties, its diversified portfolio and IAC's strategic support position it for higher growth than the global average.

Dotdash Meredith - Print

Expected Growth: 0.1%

The print publishing industry is experiencing a decline, driven by shifting consumer preferences towards digital media. Dotdash Meredith's print business is likely to continue this trend, with a growth rate below the global average.

Intersegment Eliminations

Expected Growth: 0.3%

As Intersegment Eliminations is not a revenue-generating segment, its growth is largely a function of the company's overall financial activity and intercompany transactions. A defensive growth figure of 0.3% is applied.

7. Detailed Products

Angie's List

A membership-based review platform that connects consumers with trusted home service professionals

HomeAdvisor

A home services marketplace that connects homeowners with pre-screened professionals

Thumbtack

A platform that connects customers with professionals for various tasks and projects

Care.com

A platform that connects families with caregivers and babysitters

Match.com

A online dating platform that connects singles

OkCupid

A online dating platform that connects singles

Tinder

A location-based online dating platform that connects singles

Dotdash

A digital media company that operates various online brands and websites

8. IAC Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

IAC Inc. operates in a highly competitive industry, with many substitutes available to customers. However, the company's strong brand recognition and diversified portfolio of brands help to mitigate the threat of substitutes.

Bargaining Power Of Customers

IAC Inc.'s customers have relatively low bargaining power due to the company's diversified portfolio of brands and its ability to adapt to changing consumer preferences.

Bargaining Power Of Suppliers

IAC Inc. relies on a diverse range of suppliers, which reduces the bargaining power of individual suppliers. However, the company's dependence on a few key suppliers for certain products and services increases the bargaining power of those suppliers.

Threat Of New Entrants

The threat of new entrants is high in IAC Inc.'s industry, as the barriers to entry are relatively low and the market is highly competitive. However, the company's strong brand recognition and established market position help to mitigate this threat.

Intensity Of Rivalry

The intensity of rivalry in IAC Inc.'s industry is high, with many established players competing for market share. The company's diversified portfolio of brands and its ability to adapt to changing consumer preferences help to mitigate this threat.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 25.60%
Debt Cost 8.99%
Equity Weight 74.40%
Equity Cost 10.74%
WACC 10.29%
Leverage 34.41%

11. Quality Control: IAC Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Yelp

A-Score: 5.2/10

Value: 6.5

Growth: 7.8

Quality: 8.4

Yield: 0.0

Momentum: 2.0

Volatility: 6.3

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Liberty Broadband

A-Score: 5.1/10

Value: 7.4

Growth: 9.0

Quality: 8.2

Yield: 0.0

Momentum: 1.0

Volatility: 5.0

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Shutterstock

A-Score: 5.0/10

Value: 6.6

Growth: 3.9

Quality: 6.1

Yield: 8.0

Momentum: 1.5

Volatility: 3.7

1-Year Total Return ->

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CarGurus

A-Score: 4.7/10

Value: 2.6

Growth: 6.7

Quality: 8.4

Yield: 0.0

Momentum: 5.0

Volatility: 5.7

1-Year Total Return ->

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Twilio

A-Score: 4.4/10

Value: 1.6

Growth: 8.1

Quality: 5.4

Yield: 0.0

Momentum: 8.0

Volatility: 3.0

1-Year Total Return ->

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IAC

A-Score: 4.0/10

Value: 6.9

Growth: 2.7

Quality: 4.6

Yield: 0.0

Momentum: 3.5

Volatility: 6.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

38.19$

Current Price

38.19$

Potential

-0.00%

Expected Cash-Flows