Hold Rating Maintained for IAC/InteractiveCorp Amid Strategic Uncertainty and Valuation Challenges

BTIG analyst Jake Fuller has maintained their neutral stance on IAC stock, giving a Hold rating on May 7.

Jake Fuller has given his Hold rating due to a combination of factors surrounding IAC/InteractiveCorp.’s current financial and strategic position. The recent spin-off of Angi has led to adjustments in IAC’s financial model, resulting in a revised forecast for revenue and EBITDA that aligns with market consensus. Despite these changes, the company’s net asset value (NAV) analysis suggests a slightly negative implied value for its wholly-owned assets and stakes, particularly when excluding the MGM stake.
Additionally, while IAC holds a significant amount of cash and remains free cash flow positive, the strategic focus on capital returns and potential mergers and acquisitions introduces uncertainty. The lack of clarity on monetizing the MGM stake, coupled with the application of a holding company discount, further complicates the valuation. Consequently, Jake Fuller maintains a Hold rating, reflecting these mixed signals and the fair value range derived from the NAV framework.

Fuller covers the Consumer Cyclical sector, focusing on stocks such as Expedia, Booking Holdings, and Airbnb. According to TipRanks, Fuller has an average return of 6.1% and a 51.82% success rate on recommended stocks.

In another report released on May 7, Piper Sandler also maintained a Hold rating on the stock with a $44.00 price target.