IAC Inc. (NASDAQ: IAC)

Sector: Communication Services Industry: Internet Content & Information CIK: 0001800227
Market Cap 3.18 Bn
P/B 0.66
P/E -14.05
P/S 1.16
ROIC (Qtr) 0.47
Div Yield % 0.00
Rev 1y % (Qtr) -8.13
Total Debt (Qtr) 1.43 Bn
Debt/Equity (Qtr) 0.30

About

IAC Inc., commonly known as IAC, is a prominent Internet company with a diverse range of businesses spanning multiple industries. The company's origins trace back over 25 years, starting as a hybrid media/electronic retailing company, and has since evolved into a leading online publisher and provider of home services. IAC's primary business activities encompass three main segments: Dotdash Meredith, Angi Inc., and Care.com. Dotdash Meredith is a leading digital and print publisher, offering inspiring, informative, entertaining, and empowering content...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 1.01B provide 44.20x coverage of short-term debt 22.75M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 134.79M provides exceptional 117.52x coverage of minority interest expenses 1.15M, showing strong core operations.
  • Robust free cash flow of 119.69M exceeds capital expenditure of 15.10M by 7.92x, indicating strong organic growth funding capability.
  • Strong tangible asset base of 4.71B provides 3.29x coverage of total debt 1.43B, indicating robust asset backing and low credit risk.
  • Tangible assets of 4.71B provide exceptional 73.46x coverage of deferred revenue 64.12M, showing strong service capability backing.

Bear case

  • Operating cash flow of 134.79M barely covers its investment activities of (371.43M), with a coverage ratio of -0.36, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (371.43M) provide weak support for R&D spending of 229.79M, which is -1.62x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 1.01B provide limited coverage of acquisition spending of (385.85M), which is -2.61x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 134.79M shows concerning coverage of stock compensation expenses of 42.35M, with a 3.18 ratio indicating potential earnings quality issues.
  • Operating cash flow of 134.79M provides minimal -1.26x coverage of tax expenses of (106.73M), suggesting potential tax planning inefficiencies or unsustainable tax positions.

Peer comparison

Companies in the Internet Content & Information
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GOOGL Alphabet Inc. 4,538.16 Bn 131.46 27.23 33.71 Bn
2 META Meta Platforms, Inc. 1,747.49 Bn 74.30 23.25 51.06 Bn
3 SPOT Spotify Technology S.A. 103.00 Bn 62.32 5.18 2.57 Bn
4 BIDU Baidu, Inc. 62.73 Bn 49.63 3.42 13.66 Bn
5 RDDT Reddit, Inc. 32.18 Bn 92.16 16.90 0.03 Bn
6 NBIS Nebius Group N.V. 27.81 Bn 127.53 81.80 4.51 Bn
7 TME Tencent Music Entertainment Group 24.66 Bn 15.77 5.54 0.54 Bn
8 PINS Pinterest, Inc. 16.95 Bn 8.53 4.18 0.21 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.49 1.10
EV to Cash from Ops. EV/CFO 26.10 -3.08
EV to Debt EV to Debt 2.46 28.98
EV to EBIT EV/EBIT -17.34 -26.54
EV to EBITDA EV/EBITDA 12.96 9.30
EV to Free Cash Flow [EV/FCF] EV/FCF 29.40 -67.01
EV to Market Cap EV to Market Cap 1.11 0.90
EV to Revenue EV/Rev 1.29 61.25
Price to Book Value [P/B] P/B 0.66 1.56
Price to Earnings [P/E] P/E -14.05 2.92
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.33
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -8.92
Dividend per Basic Share Div per Share (Qtr) 0.00 0.31
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.58
Interest Coverage Int. cover (Qtr) -1.56 -202.56
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -183.97 -24.06
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -41.53 175.36
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.94
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -23.14 31.53
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 14.58 -472.14
EBIT Growth (1y) % EBIT 1y % (Qtr) -224.28 32.66
EBT Growth (1y) % EBT 1y % (Qtr) -1,833.44 -25.80
EPS Growth (1y) % EPS 1y % (Qtr) -314.71 -18.36
FCF Growth (1y) % FCF 1y % (Qtr) -61.30 20.83
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -2.05 19.58
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.38 0.74
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 1.70 1.54
Current Ratio Curr Ratio (Qtr) 2.56 3.38
Debt to Equity Ratio Debt/Equity (Qtr) 0.30 -0.39
Interest Cover Ratio Int Coverage (Qtr) -1.56 -202.56
Times Interest Earned Times Interest Earned (Qtr) -1.56 -202.56
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 0.10 -4,283.87
EBIT Margin % EBIT Margin % (Qtr) -7.41 -4,786.62
EBT Margin % EBT Margin % (Qtr) -12.17 -5,002.12
Gross Margin % Gross Margin % (Qtr) 67.90 58.65
Net Profit Margin % Net Margin % (Qtr) -8.30 -5,003.08