A significant driver of top-line growth: Vimeo Inc. (VMEO)

Vimeo Inc. (NASDAQ: VMEO) stock jumped 8.70% on Monday to $4.25 against a previous-day closing price of $3.91. With 1.73 million shares changed hands, the volume of the stock remained lighter than its average volume of 2.18 million shares. During the session, the Software – Application company that operates in wider Technology sector, reached to the highest price of $4.2600 whereas the lowest price it dropped to was $3.8900. The 52-week range on VMEO shows that it touched its highest point at $15.52 and its lowest point at $3.07 during that stretch. It currently has a 1-year price target of $7.80.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of VMEO was up-trending over the past week, with a rise of 10.97%, but this was up by 17.73% over a month. Three-month performance surged to 17.40% while six-month performance fell -28.93%. The stock lost -70.81% in the past year, while it has gained 23.91% so far this year. A look at the trailing 12-month EPS for VMEO yields -0.61 with Next year EPS estimates of -0.51. For the next quarter, that number is -0.15. This implies an EPS growth rate of -3.90% for this year and 16.40% for next year.

Float and Shares Shorts:

At present, 161.53 million VMEO shares are outstanding with a float of 149.52 million shares on hand for trading. On Oct 13, 2022, short shares totaled 7.21 million, which was 4.33% higher than short shares on Sep 14, 2022. In addition to Ms. Anjali Sud as the firm’s CEO & Director, Mr. Mark Kornfilt serves as its Pres.

Institutional Ownership:

Through their ownership of 99.12% of VMEO’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 47.37% of VMEO, in contrast to 40.26% held by mutual funds. Shares owned by individuals account for 2.20%. As the largest shareholder in VMEO with 8.33% of the stake, The Vanguard Group, Inc. holds 13,080,628 shares worth 13,080,628. A second-largest stockholder of VMEO, Southeastern Asset Management, In, holds 11,296,320 shares, controlling over 7.19% of the firm’s shares. Jackson Square Partners LLC is the third largest shareholder in VMEO, holding 10,979,957 shares or 6.99% stake. With a 4.11% stake in VMEO, the Longleaf Partners Small Cap Fund is the largest stakeholder. A total of 6,460,796 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.54% of VMEO stock, is the second-largest Mutual Fund holder. It holds 3,982,389 shares valued at 13.66 million. Vanguard Small Cap Index Fund holds 2.19% of the stake in VMEO, owning 3,441,103 shares worth 11.8 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for VMEO since 7 analysts follow the stock currently. There are 3 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 4 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With VMEO analysts setting a high price target of $10.00 and a low target of $5.00, the average target price over the next 12 months is $7.25. Based on these targets, VMEO could surge 135.29% to reach the target high and rise by 17.65% to reach the target low. Reaching the average price target will result in a growth of 70.59% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. VMEO will report FY 2022 earnings on 02/08/2024. Analysts have provided yearly estimates in a range of -$0.59 being high and -$0.62 being low. For VMEO, this leads to a yearly average estimate of -$0.61. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Vimeo Inc. surprised analysts by $0.04 when it reported -$0.13 EPS against a consensus estimate of -$0.17. The surprise factor in the prior quarter was $0.01. Based on analyst estimates, the high estimate for the next quarter is -$0.13 and the low estimate is -$0.16. The average estimate for the next quarter is thus -$0.15.

Summary of Insider Activity:

Insiders traded VMEO stock several times over the past three months with 4 Buys and 0 Sells. In these transactions, 15,544 shares were bought while 0 shares were sold. The number of buy transactions has increased to 26 while that of sell transactions has risen to 1 over the past year. The total number of shares bought during that period was 2,494,191 while 6,769 shares were sold.

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