IAC (NASDAQ:IAC) has been downgraded by Zacks Research from a “hold” rating to a “strong sell” rating, as reported on Tuesday. This shift comes in the wake of disappointing earnings results that have raised concerns among investors and analysts alike.
The company’s earnings report, published on February 3, 2024, revealed a loss of $0.99 earnings per share (EPS), significantly missing analysts’ expectations of a profit of $0.67 by $1.66. IAC reported revenue of $645.98 million, which slightly exceeded projections of $641.01 million. However, the firm also highlighted a negative net margin of 4.35% and a negative return on equity of 2.43%, indicating ongoing financial struggles.
Analyst Ratings Reflect Market Sentiment
IAC has faced scrutiny from various analysts recently. Weiss Ratings reaffirmed a “sell (d-)” rating on January 22, 2024, while Barclays adjusted its target price from $52.00 to $48.00, maintaining an “overweight” rating. Meanwhile, Wall Street Zen lowered its rating from “hold” to “sell” on February 7, 2024.
Other notable adjustments include Benchmark, which reduced its price objective from $60.00 to $57.00 while keeping a “buy” rating, and KeyCorp, which cut its target from $45.00 to $41.00 but also maintained an “overweight” rating. Current consensus from analysts indicates ten ratings for a Buy, three for Hold, and two for Sell, leading to a moderate buy consensus with an average target price of $46.83, according to MarketBeat.
Investor Activity and Market Response
Following the downgrade, IAC shares saw a decline of 2.1%. Furthermore, several hedge funds have recently modified their positions in the company. For instance, Elevation Wealth Partners LLC acquired a new stake worth $25,000 during the fourth quarter, while Hantz Financial Services Inc. increased its holdings by 173.4%, now owning 782 shares valued at approximately $31,000.
Other institutional investors such as Advisory Services Network LLC and JFS Wealth Advisors LLC have also entered new positions, reflecting a growing interest despite the company’s recent setbacks. Notably, institutional ownership remains high, with approximately 88.90% of IAC’s stock held by these entities.
IAC, headquartered in New York City, operates as a holding company focused on consumer-oriented internet businesses. Its portfolio includes digital media brands and subscription services, reaching millions of users across North America and parts of Europe. The firm’s Dotdash Meredith division is known for creating original content and data-driven journalism across various niches.
As IAC continues to navigate these challenges, the response from analysts and investors will be crucial in shaping its future trajectory in the competitive digital landscape.
