IAC/InterActiveCorp

This is our first report on IAC, a major media and internet player publishing original and engaging digital content in the form of articles, illustrations, and videos and images across various fields. The company delivered a mixed set of results in the last quarter, failing to meet the revenue expectations of Wall Street but managing an earnings beat. Transacting SPs was down 12% year-over-year. They had a HomeAdvisor that connected customers with service providers based on what the customer wanted to be done and what the service provider was qualified to accomplish. A homeowner could then book and pay for a job online via Handy, and the platform would take care of the rest. The management believes that if the company returns to its pre-rebrand levels of SEO presence, it may increase its growth in this area by 75%. Looking forward, IAC’s management intends to increase margins by generating additional revenue from a fixed-cost basis and they anticipate double-digit revenue growth in the coming quarters. We initiate coverage on the stock of IAC/InterActiveCorp with a ‘Hold’ rating.