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IAC/InterActiveCorp Ordinary Shares - New IAC

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Morningstar’s Analysis

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PREMIUM

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PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

IAC Missed Q2 Expectations Due to Weakness in Angi; Maintaining $111 FVE; Shares Overvalued

Ali Mogharabi Senior Equity Analyst

Analyst Note

| Ali Mogharabi |

IAC second-quarter results came in below FactSet consensus estimates, mainly due to weakness in Angi from rebranding, which lowered traffic more than expected to websites and apps resulting in a miss on the top- and bottom-line of that business. IAC’s other businesses performed well during the quarter with strong double-digit growth in revenue, which also drove margin expansion. We expect the network effect of the Angi platform to strengthen during the remainder of this year and beyond as the firm’s more aggressive marketing will increase awareness of the new brand and traffic to the platform. We are maintaining our $111 fair value estimate for IAC and believe the shares are overvalued. Based on comparable multiples, our sum-of-the-parts valuation for IAC is $196 per share.

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Company Profile

Business Description

IAC is an Internet media company with segments that include Angi (47% of total revenue), Dotdash (10%), search (24%), and emerging and other (19%). The firm spun off the narrow-moat dating app provider Match Group in second-quarter 2020 and the no-moat video software provider Vimeo in second-quarter 2021.

Contact
555 West 18th Street
New York, NY, 10011
T +1 212 314-7300
Sector Communication Services
Industry Internet Content & Information
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Slow Growth
Employees 8,200

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