Needham & Company Cuts Price Target on IAC/InterActiveCorp (IAC) Following 4Q
Needham & Company maintained a Buy rating on IAC/InterActiveCorp (NASDAQ: IAC), and cut the price target to $62.00 (from $78.00), following the company's 4Q earnings report. Publishing revenue for 4Q15 was $180M, down 13% y/y, but slightly above consensus of $176M. Needham expects FY16 Publishing and Applications revenue to decline and the revenue growth of the Match Group to be slightly slower than expected.
Analyst Kerry Rice commented, "We expect FY16 Publishing and Applications revenue to decline and the revenue growth of the Match Group to be slightly slower than expected. As a result, we also estimate lower overall EBITDA for FY16. Despite lower estimates for these segments, our sum-of-the-parts analysis still indicates that shares are undervalued, even after also reducing our EV/EBITDA multiple assumptions for the Match Group. The new Google contract creates headwinds for Publishing and Applications, as well as the secular shifts toward “opt-in”, native applications and mobile. While we expect strong Match Group revenue growth, mobile monetization, conversion rate, technology replatforming, organizational restructuring, and a strong dollar should overshadow strong subscriber growth. Positively, HomeAdvisor revenue and EBITDA should exhibit strong FY16 growth."
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Shares of IAC/InterActiveCorp closed at $45.78 yesterday.