Vimeo Stock Surges on Strong Q4 Forecast
Vimeo stock surges over 18% in premarket trading on Tuesday. This boost came after the video platform released a Q4 revenue and operating income forecast that exceeded Wall Street expectations.
Q3 Results Beat Analyst Projections
In addition to the upbeat forecast, Vimeo’s Q3 results also outperformed market projections:
- Earnings per Share (EPS): Vimeo reported an EPS of $0.05, beating the anticipated $0.01.
- Revenue Growth: Revenue increased to $104.56 million, surpassing the consensus estimate of $99.48 million.
- Adjusted EBITDA: Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) grew by 26% year-over-year to $16.1 million, well above the expected $8.84 million.
- Gross Margin: Vimeo’s gross margin was reported at 79%, slightly down from last year’s 80% but above the forecasted 77.4%.
Promising Q4 Projections
Looking ahead, Vimeo offered an optimistic Q4 outlook:
- Revenue: Expected to be around $100 million, ahead of the $97.1 million estimate.
- Operating Income: Projected to reach about $2 million, which sharply contrasts with the anticipated $5.55 million loss.
- Adjusted EBITDA: Predicted to approach $10 million, showcasing continued improvement.
Analysts Raise Price Targets for Vimeo Stock
Following Vimeo’s performance update, analysts adjusted their price targets:
- Truist Securities: Analysts raised their target from $7 to $9, citing Vimeo’s low valuation, steady execution, strong balance sheet, and video consumption growth as positives.
- Piper Sandler: Piper analysts increased their target from $5 to $7, noting Vimeo’s Q3 progress. However, they stated that clearer revenue growth would be ideal before fully revisiting their stance.
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