IAC shares target cut to $47 by Citizens JMP, retains optimism

Tuesday, on the stock market, Citizens JMP analyst Nicholas Jones revised the price target for IAC/InterActiveCorp (NASDAQ:IAC) shares, lowering it to $47.00 from the previous $64.00. Despite the decrease, the analyst maintained a Market Outperform rating for the company. According to InvestingPro data, IAC currently trades at $36.70, with analyst targets ranging from $38 to $64, suggesting potential upside. The stock’s Financial Health Score stands at "GOOD," supported by strong liquidity metrics.

Jones highlighted several potential catalysts for IAC, particularly within its Dotdash Meredith (NYSE:MDP) (DDM) segment and Care.com operations. These factors, according to Jones, are currently undervalued by the market but have the potential to significantly improve the company’s financial results. The company maintains a healthy current ratio of 2.7x and operates with moderate debt levels, though InvestingPro analysis indicates revenue declined by 3.9% in the last twelve months.

The adjusted price target of $47 reflects updated estimates and a revised Sum of the Parts (SOTP) valuation approach. This new target takes into account the latest available financial data and strategic business valuations.

Jones emphasized IAC’s proven ability to incubate businesses and generate shareholder value, which remains a fundamental component of the firm’s investment thesis. This track record supports the analyst’s continued positive outlook on IAC’s stock.

The Market Outperform rating suggests that Citizens JMP expects IAC’s stock performance to exceed the average return of the market over the next 12 to 18 months, despite the lowered price target. This rating indicates the firm’s confidence in IAC’s future prospects and its potential to outperform its peers.

In other recent news, IAC Inc. reported a significant miss in its Q1 2025 earnings, with earnings per share (EPS) at -2.64, falling short of the expected -0.73, and revenue at $570.5 million, below the anticipated $809.14 million. Dotdash Meredith, a key division of IAC, reported a 7% increase in digital revenues and a 46% rise in EBITDA, excluding a one-time lease gain. Meanwhile, Dotdash Meredith has initiated a private offering to sell $400 million in senior secured notes, as part of its strategy to repay existing debt. Additionally, IAC’s issuer credit rating was upgraded to ’BB’ from ’BB-’ by S&P Global Ratings following the spin-off of Angi Inc., reflecting a favorable view of IAC’s business driven by Dotdash Meredith. S&P Global Ratings expects IAC to end 2025 with approximately $1.2 billion in cash and a free operating cash flow of about $35 million, projecting an improvement to around $111 million in 2026. Furthermore, IAC has repurchased approximately $200 million in shares year to date and increased its share repurchase authorization. These developments indicate a proactive approach to financial management and strategic growth amid challenging market conditions.

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