IAC - Embedded Expectations Analysis - 2021 01 21
IAC/InterActiveCorp (IAC:USA) currently trades at a historical high relative to Uniform earnings, with a 407.0x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about their Vimeo segment, ANGI engagement and penetration, and the sustainability of demand recovery across their business linesMoreover, management may be downplaying concerns about Zoom becoming a possible competitor, and they may be exaggerating the potential and video platform capabilities of Vimeo. In addition, they may also lack confidence in their ability to find new marketing channels, enter new vertical markets, and further scale engagement and penetration for ANGI. Moreover, they may have concerns about their decision to acquire homeowners without monetizing, the sustainability of demand recovery for childcare and home services, and DotDash's positioning in publishing
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
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