IAC/InteractiveCorp (IACI) is seeing big gains in 2011, recently spiking into a new multi-year high after reporting strong Q2 results that included an 81% earnings surprise. With estimates on the rise and bullish growth projection, this Zacks #1 Rank stock just ended your search for momentum.
Company Description
IAC/InterActiveCorp operates in the Internet business in the United States and Internationally through four segments; Search, Match, ServiceMagic and Media/Other. The company was founded in 1986 and has a market cap of $3.6 billion.
Although IACI had been trending higher for most of the year, shares got an extra boost in late July after the company reported strong Q2 results that came in ahead of expectations.
Second-Quarter Results
Revenue for the period was up 23% from last year to $485 million. Earnings also looked great, coming in at 47 cents, 81% ahead of the Zacks Consensus Estimate.
The strong performance was led by the company’s largest segment, Search, where revenue was up 28% from last year to $252 million. Its popular dating web site Match.com was close behind, with revenue up 20% to $116 million.
Financial Profile
IACI will continue to benefit from its awesome financial profile, with cash and short-term investments of $912 million against total debt of just $96 million.
Estimates
We saw some pretty decent movement in estimates off the good quarter, with the current year adding 15 cents to $1.36 while the next-year estimates gained 27 cents to $1.76, a bullish 29% growth projection.
Valuation
But in spite of the gains, the valuation picture still looks solid, with a PEG ratio of .93, safely below the benchmark for value of 1.
12-Month Chart
On the chart, shares jumped into a new multi-year high on the good quarter before pulling back a bit with the weak market. Look for support from the long-term trend on any weakness, take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Momentum Trader Service.
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