IAC/InterActiveCorp. Is A Top SMID Idea For 2017

Naming IAC/InterActiveCorp IAC as one of the top SMID ideas for 2017, Aegis Capital’s Victor Anthony noted that the stock continues to trade at a discount to its asset values despite several positives.

Anthony maintains a Buy rating on the company, with a price target of $80.

Catalysts

The analyst pointed out that the shares were still trading at a discount to the asset value despite the strong execution at HomeAdvisor, the continuing momentum at Match Group Inc MTCH led by Tinder, increased transparency, active share buybacks by management, Vimeo receiving acquisition interest and the applications business showing signs of stabilization.

Among the catalysts for IAC in 2017 are continued robust execution at HomeAdvisor, a potential spin of the Match Group stake, a potential transaction with Angie's List Inc ANGI at what Anthony believes would be a “reasonable multiple” and the stabilization of the applications business.

Estimate Changes

The Q4:16 revenue estimate has been lowered from $783 million to $780 million, while the adjusted EBITDA estimate has been lowered from $164 million to $161 million. Both estimates are now below the consensus expectations.

For 2017, the revenue estimate has been lowered from $3.290 billion to $3.27 billion, while the adjusted EBITDA estimate has been reduced from $614 million to $609 million.