NEW YORK (TheStreet) -- IAC/InterActiveCorp (IACI) stock is increasing by 0.88% to $59.92 in after-hours trading on Wednesday, after the media company announced that it is creating a new digital media entity called IAC Publishing.
The company, which also owns the online dating organization Match Group (MTCH) and video service Vimeo, said the digital media company will unite "the web's most trusted brands."
The new group will include IAC's various brands, including About.com, Dictionary.com and The DailyBeast, the company announced on Wednesday afternoon.
IAC Publishing will have access to about 100 million monthly U.S. users.
"Our publishers are a diverse and trusted mix of informative content and premium news, with each focused squarely on the distinct needs of its audience," IAC Publishing CEO Doug Leeds said in a statement. "Federating these businesses into a single operating group means our world-class brands can remain agile and independent while benefiting from group-wide investments in data infrastructure, technology and emerging ad products."
Separately, TheStreet Ratings team rates IAC/INTERACTIVECORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
We rate IAC/INTERACTIVECORP (IACI) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 15.2%. Since the same quarter one year prior, revenues slightly increased by 7.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The gross profit margin for IAC/INTERACTIVECORP is currently very high, coming in at 75.52%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, IACI's net profit margin of 7.82% significantly trails the industry average.
- Despite currently having a low debt-to-equity ratio of 0.54, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that IACI's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.63 is high and demonstrates strong liquidity.
- IAC/INTERACTIVECORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, IAC/INTERACTIVECORP reported lower earnings of $2.69 versus $3.27 in the prior year. This year, the market expects an improvement in earnings ($3.18 versus $2.69).
- You can view the full analysis from the report here: IACI
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.