Earnings Beat: Vimeo, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

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A week ago, Vimeo, Inc. (NASDAQ:VMEO) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. It was overall a positive result, with revenues beating expectations by 5.1% to hit US$105m. Vimeo also reported a statutory profit of US$0.05, which was an impressive 400% above what the analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Vimeo

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NasdaqGS:VMEO Earnings and Revenue Growth November 7th 2024

Taking into account the latest results, Vimeo's four analysts currently expect revenues in 2025 to be US$420.2m, approximately in line with the last 12 months. Statutory earnings per share are forecast to plunge 40% to US$0.12 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$418.0m and earnings per share (EPS) of US$0.055 in 2025. Although the revenue estimates have not really changed, we can see there's been a sizeable expansion in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

The consensus price target rose 23% to US$6.75, suggesting that higher earnings estimates flow through to the stock's valuation as well. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Vimeo, with the most bullish analyst valuing it at US$9.00 and the most bearish at US$4.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Vimeo's revenue growth is expected to slow, with the forecast 0.2% annualised growth rate until the end of 2025 being well below the historical 11% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% per year. Factoring in the forecast slowdown in growth, it seems obvious that Vimeo is also expected to grow slower than other industry participants.

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