IAC Has More Than Tripled From Its March Low—Can It Keep Going After Earnings?
Since briefly dropping below the $40 level in March, IAC (IAC) has rallied at an incredible rate. The stock is now trading over $135. Those prices have been adjusted to account for the stock split that occurred on July 1. The split took place as a means to spinoff Match Group and it was a rather complicated split.
If you aren’t familiar with IAC, it is conglomerate of different media and internet companies around the world. Some of the sites include Angie’s List, Ask.com, HomeAdvisor, and Investopedia.
IAC is set to report second quarter earnings results after the closing bell on Monday. There is a conference call scheduled for Tuesday morning to discuss the results. Because of the spinoff of Match and the other dating sites, it’s difficult to compare past earnings results with the reports going forward.
For the first quarter IAC reported a loss of $2.49 per share. Analysts expect the company to report EPS of $2.12 for the second quarter. This is like comparing apples and oranges and it will be like this for the next year.
Looking at Tickeron’s Screener, the fundamental indicators and the technical indicators are very much at odds for IAC. On the fundamental side the stock gets three negative ratings and one positive rating. We see that the outlook is negative and the stock is overvalued. The Profit vs. Risk Rating is also poor, but the P/E Growth Rating is good.
On the technical side there are three positive readings and not a single negative reading. The RSI generated a bullish signal five days ago, the MACD generated one 10 days ago, and the Momentum Indicator generated a signal five days ago.
If we look at the daily chart for IAC, the rally has been unbelievably impressive. We see very instances where the stock fell for more than a few days in a row and even then the losses were minor. In the last 19 weeks the stock has moved up in 14 of them and down in only five weeks.
The huge run up has led to some pretty optimistic sentiment for IAC. According to the Wall Street Journal there are 17 analysts covering the stock and 13 have the stock rated as a “buy” and one has it rated as a “hold”. This gives us a buy percentage of 94.1% and that is much higher than the average stock.
The short interest ratio for IAC is at 1.71 and that is below average. Like the buy percentage it is indicative of optimism. Because the stock is “new”, the short interest report on July 15 was the first one for the stock so there is nothing to compare it to. It also means that we don’t know if the ratio is trending higher or lower which would tell us if short sellers were becoming more or less optimistic.
Finally, the put/call ratio for IAC is at 0.869 and that gives us a third sentiment indicator that points to more optimism than the average stock. There are 4,941 puts open and 5,685 calls open at this time. That isn’t a great deal of open interest for a stock that sees 3.7 million shares change hands each day.
To me, the overall picture for IAC is muddled. The technical indicators suggest that the stock could continue its rally, but the fundamental indicators suggest that the stock may struggle over the long term. The overly optimistic sentiment indicators are a concern as well. If IAC should disappoint investors with the earnings report on Monday, we could see a huge decline. The expectations seem to be pretty high and that means the hurdle the company needs to clear is high as well.
IAC's Stochastic Oscillator is sitting in oversold zone for 9 days
The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an uptrend is expected.
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Indicator shows that the ticker has stayed in the oversold zone for 5 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an Uptrend is expected.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where IAC advanced for three days, in of 302 cases, the price rose further within the following month. The odds of a continued upward trend are .
IAC may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on December 09, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on IAC as a result. In of 82 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for IAC turned negative on December 12, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 49 similar instances when the indicator turned negative. In of the 49 cases the stock turned lower in the days that followed. This puts the odds of success at .
The 50-day moving average for IAC moved below the 200-day moving average on December 03, 2024. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where IAC declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for IAC entered a downward trend on December 24, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.756) is normal, around the industry mean (11.194). P/E Ratio (17.990) is within average values for comparable stocks, (48.888). Projected Growth (PEG Ratio) (0.772) is also within normal values, averaging (3.441). Dividend Yield (0.000) settles around the average of (0.026) among similar stocks. P/S Ratio (1.058) is also within normal values, averaging (19.660).
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating slightly worse than average price growth. IAC’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. IAC’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 90, placing this stock worse than average.
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General Information
a provider of diversified media, Internet and e-commerce services
Industry InternetSoftwareServices