As the Q4 earnings season wraps, let’s dig into this quarter’s best and worst performers in the digital media & content platforms industry, including Vimeo (NASDAQ:VMEO) and its peers.
AI-driven content creation, personalized media experiences, and digital advertising are evolving, which could benefit companies investing in these themes. For example, companies with a portfolio of licensed visual content or platforms facilitating direct monetization models could see increased demand for years. On the other hand, headwinds include growing regulatory scrutiny on AI-generated content, with many publishers balking at anything that gets no human oversight. Additional areas to navigate include the phasing out of third-party cookies, which could make traditional ways of tracking the online behavior of consumers (a secret sauce in digital marketing) much less effective.
The 7 digital media & content platforms stocks we track reported a slower Q4. As a group, revenues beat analysts’ consensus estimates by 1.4% while next quarter’s revenue guidance was 3.5% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 17.1% since the latest earnings results.
Vimeo (NASDAQ:VMEO)
Originally launched in 2004 as a platform for filmmakers seeking a high-quality alternative to YouTube, Vimeo (NASDAQ:VMEO) provides cloud-based video creation, editing, hosting, and distribution software that helps businesses and creators make, manage, and share professional-quality videos.
Vimeo reported revenues of $103.2 million, down 2.3% year on year. This print exceeded analysts’ expectations by 2.5%. Despite the top-line beat, it was still a softer quarter for the company with a significant miss of analysts’ EPS estimates and revenue guidance for next quarter slightly missing analysts’ expectations.
Vimeo Total Revenue
The stock is down 30.5% since reporting and currently trades at $4.72.
Formerly known as K12, Stride (NYSE:LRN) is an education technology company providing education solutions through digital platforms.
Stride reported revenues of $587.2 million, up 16.3% year on year, outperforming analysts’ expectations by 2.9%. The business had a very strong quarter with an impressive beat of analysts’ EPS estimates.
Stride Total Revenue
The market seems happy with the results as the stock is up 14% since reporting. It currently trades at $137.50.
Originally a pioneering technology publisher founded in 1927 that became famous for PC Magazine, Ziff Davis (NASDAQ:ZD) operates a portfolio of digital media brands and subscription services across technology, shopping, gaming, healthcare, and cybersecurity markets.
Ziff Davis reported revenues of $412.8 million, up 5.9% year on year, falling short of analysts’ expectations by 2.7%. It was a disappointing quarter as it posted a significant miss of analysts’ full-year EPS guidance estimates.
Ziff Davis delivered the highest full-year guidance raise but had the weakest performance against analyst estimates in the group. As expected, the stock is down 34.6% since the results and currently trades at $31.39.
With a vast library of over 562 million visual assets documenting everything from breaking news to iconic historical moments, Getty Images (NYSE:GETY) is a global visual content marketplace that licenses photos, videos, illustrations, and music to businesses, media outlets, and creative professionals.
Getty Images reported revenues of $247.3 million, up 9.5% year on year. This result beat analysts’ expectations by 0.5%. Taking a step back, it was a softer quarter as it logged a significant miss of analysts’ EPS estimates and full-year revenue guidance missing analysts’ expectations.
Getty Images had the weakest full-year guidance update among its peers. The stock is down 23.4% since reporting and currently trades at $1.65.
Originally known as InterActiveCorp and built through Barry Diller's strategic acquisitions since the 1990s, IAC (NASDAQ:IAC) operates a portfolio of category-leading digital businesses including Dotdash Meredith, Angi, and Care.com, focusing on digital publishing, home services, and caregiving platforms.
IAC reported revenues of $989.3 million, down 6.5% year on year. This number topped analysts’ expectations by 5.9%. However, it was a slower quarter as it produced a significant miss of analysts’ EPS estimates.
IAC pulled off the biggest analyst estimates beat but had the slowest revenue growth among its peers. The stock is down 18.9% since reporting and currently trades at $33.24.
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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