Vimeo (VMEO) AI Stock Analysis

• Market Cap: $734.10M
• Dividend Yield: N/A
• Average Volume (3M): 1.38M
• Price to Earnings (P/E): 58.4
• Beta (1Y): 1.61
• Revenue Growth: -1.35%
• EPS Growth: -59.67%
• Country: US
• Employees: 1,102
• Sector: Technology
• Sector Strength: 82
• Industry: Software - Application
• EPS (TTM): 0.04
• Shares Outstanding: 156,311,050
• 10 Day Avg. Volume: 1,365,138
• 30 Day Avg. Volume: 1,378,200
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.51
• Enterprise Value/Revenue: 0.90
• Enterprise Value/Gross Profit: 1.15
• Enterprise Value/Ebitda: 24.26
• 1Y Price Target: $7.00
• Price Target Upside: 58.01% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 72 Outperform
• Price Target: ―

Vimeo's overall stock score reflects a strong financial performance, characterized by revenue growth and a shift to profitability, coupled with a robust balance sheet. The earnings call highlighted promising growth prospects, particularly in the enterprise segment bolstered by AI innovations. However, technical analysis indicates potential short-term challenges, and the stock's valuation suggests limited immediate upside. The absence of significant corporate events maintains the focus on financial and operational execution.

Positive Factors

Financial Performance

EBITDA of $10.9 million was above estimates, reflecting lower than expected R&D, S&M, and G&A expenses.

Growth Potential

Vimeo is generating revenue from new investments such as AI translations, indicating future growth potential.

Market Position

VMEO continues to operate in a market with an attractive TAM and positive secular tailwinds.

Negative Factors

Macroeconomic Impact

Management did not provide guidance for the second quarter and noted some deals were delayed due to macroeconomic challenges.

Revenue Challenges

Enterprise revenue was below expectations due to a single large customer who churned.

Revenue Growth

Analyst maintains a Hold rating as incremental spending is expected to offset revenue growth, despite improved forecasts in operating losses.

Vimeo Business Overview & Revenue Model

Company Description

Vimeo, Inc., together with its subsidiaries, provides video software solutions in New York and internationally. The company provides the video tools through a software-as-a-service model, which enables its users to create, collaborate, and communicate with video on a single platform. It also offers over-the-top OTT streaming and monetization services; AI-driven video creation and editing tools; and interactive and shoppable video tools. It serves creative professionals, small businesses, marketers, agencies, schools, nonprofits, and large organizations. The company was incorporated in 2020 and is headquartered in New York, New York.

How the Company Makes Money

Vimeo primarily generates revenue through a subscription-based model, offering various tiers of service plans to individuals and businesses. These plans provide users with different levels of access to Vimeo's tools and services, including increased storage, enhanced privacy controls, and advanced video analytics. Additionally, Vimeo earns from enterprise customers by offering customized video solutions tailored to specific corporate needs. Another key revenue stream for Vimeo is transactional video on demand (TVOD), where creators can sell or rent their video content directly to viewers. While advertising is not a primary revenue source, Vimeo does form partnerships with businesses and organizations to provide integrated video solutions, which can include custom branding and dedicated support services.

Vimeo Financial Statement Overview

Summary

Vimeo has demonstrated a remarkable financial turnaround with consistent revenue growth and a shift from net losses to profitability. The balance sheet is robust with no debt, and the company maintains strong liquidity. Cash flows have improved significantly, underlining efficient cash management. While there is room for improvement in profitability margins, the financial health of Vimeo is solid, with a positive growth trajectory and low financial risk.

Income Statement

Vimeo has shown consistent revenue growth over the years, with a notable increase from $196M in 2019 to $417M in 2024. The company has significantly improved its net income from a loss of $75.6M in 2019 to a profit of $40.4M in 2024, indicating a strong turnaround. Gross profit margins have remained robust, indicating effective cost management. However, the EBIT and EBITDA margins are relatively low, suggesting room for improvement in operational efficiency.

Balance Sheet

Vimeo's balance sheet is strong, with zero debt as of the latest report, reflecting a very low risk of financial leverage. The equity ratio has increased over the years, demonstrating growing financial stability. The company has managed to maintain a healthy cash position, with cash and short-term investments consistently exceeding its total liabilities, illustrating strong liquidity. However, the return on equity could be improved to enhance shareholder value.

Cash Flow

Vimeo's cash flow situation is quite strong with a significant turnaround in operating cash flow from negative in 2019 to positive in 2024. Free cash flow has also improved, showing the company's ability to generate cash internally. The free cash flow to net income ratio is favorable, suggesting efficient cash management. The company has also shown a good trend in free cash flow growth, reflecting a solid cash position despite fluctuations in investing and financing cash flows.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	415.40M	417.01M	417.21M	433.03M	391.68M	283.22M
Gross Profit	323.59M	326.27M	325.64M	329.43M	289.14M	194.14M
EBITDA	15.37M	35.46M	30.75M	-64.92M	-44.01M	-25.48M
Net Income	13.97M	26.49M	21.56M	-79.59M	-52.77M	-50.63M
Balance Sheet
Total Assets	620.64M	642.82M	622.92M	605.43M	649.36M	371.08M
Cash, Cash Equivalents and Short-Term Investments	303.18M	325.28M	301.37M	274.50M	321.90M	110.01M
Total Debt	9.40M	0.00	0.00	19.31M	14.01M	94.56M
Total Liabilities	229.55M	234.02M	240.69M	251.57M	278.77M	286.00M
Stockholders Equity	391.09M	408.80M	382.23M	353.86M	370.60M	85.08M
Cash Flow
Free Cash Flow	48.64M	56.64M	37.68M	-37.87M	15.51M	13.02M
Operating Cash Flow	48.85M	56.86M	37.78M	-37.07M	15.95M	13.86M
Investing Cash Flow	-4.63M	-222.00K	531.00K	830.00K	-6.82M	42.00K
Financing Cash Flow	-52.70M	-32.18M	-11.70M	-10.59M	203.06M	93.87M

Vimeo Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.43
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VMEO, the sentiment is Positive. The current price of 4.43 is above the 20-day moving average (MA) of 4.09, above the 50-day MA of 4.03, and below the 200-day MA of 5.25, indicating a neutral trend. The MACD of 0.08 indicates Negative momentum. The RSI at 63.84 is Neutral, neither overbought nor oversold. The STOCH value of 80.58 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VMEO.

Vimeo Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
YALA	77 Outperform	$1.20B	9.51	21.16%	―	6.79%	12.97%
VMEO	72 Outperform	$734.10M	58.37	3.26%	―	-1.35%	-59.67%
OPFI	63 Neutral	$913.22M	50.49	-209.49%	―	6.79%	-593.75%
VTEX	63 Neutral	$744.23M	75.73	5.33%	―	4.51%	8241.83%
Sector *	61 Neutral	$35.55B	8.91	-10.55%	1.87%	8.47%	-8.26%
DSP	59 Neutral	$648.40M	306.55	5.20%	―	30.92%	―
RSKD	50 Neutral	$737.07M	―	-10.16%	―	7.96%	5.67%