Investors in IAC Inc. (NASDAQ:IAC) had a good week, as its shares rose 2.7% to close at US$54.04 following the release of its annual results. Although revenues of US$4.4b were in line with analyst expectations, IAC surprised on the earnings front, with an unexpected (statutory) profit of US$2.97 per share a nice improvement on the losses that the analystsforecast. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
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. The company is forecast to report a statutory loss of US$0.61 in 2024, a sharp decline from a profit over the last year. Before this earnings announcement, the analysts had been modelling revenues of US$4.39b and losses of US$0.61 per share in 2024.
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. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values IAC at US$128 per share, while the most bearish prices it at US$60.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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 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. 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.
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. 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 still need to take note of risks, for example - IAC has 2 warning signs (and 1 which shouldn't be ignored) 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.