IAC/Interactive Corp (IAC) has no near-term catalysts, limited scope - UBS

December 2, 2022 3:23 PM EST
Get Alerts IAC Hot Sheet
Price: $53.50 -4.91%

Rating Summary:
    23 Buy, 5 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 11 | Down: 31 | New: 13
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IAC/Interactive Corp (NASDAQ: IAC) was initiated with a Sell rating and $46 price target by UBS analyst Kunal Madhukar on Friday based on no near-term catalysts.

"IAC is a holding company; its shares reflect the value of its stakes in ANGI (19% of IAC's share price, 38% of 3Q22 revs) and MGM (48% of shares, not consolidated) as well as cash (29%)," explained Madhukar.

The analyst explained that the negative thesis is based on below-consensus F2023 expectations for ANGI, a 3-year delay to DDM Digital EBITDA target of $450M and limited scope to unlock value via spin-offs NT.

In addition, the firm expects the Street to reduce DDM expectations again when IAC provides its 2023 outlook at 4Q earnings.

"For 2023, we est revenue of ~$5.2B, modestly below the Street, with EBITDA at $333M vs Street at $349M. For 2024, we expect revenue of $5.5B, ~5% below the Street at $5.7B, and EBITDA of ~$423M in 2024, about 24% below the Street at $554M," Madhukar said.

By Sam Boughedda.

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