Vimeo Stock Surge

Vimeo (NASDAQ: VMEO) saw its shares surge more than 18% in premarket trading Tuesday after the video platform operator offered above-consensus Q4 revenue and operating income forecast.

Q3 Results

Moreover, Vimeo’s Q3 results also beat expectations, with the company reporting earnings per share (EPS) of $0.05, surpassing analyst predictions of $0.01. Revenue rose to $104.56 million, exceeding the consensus projection of $99.48 million.

Adjusted EBITDA climbed 26% year-over-year to $16.1 million, surpassing the expected $8.84 million, while gross margin stood at 79%, slightly below last year’s 80% but exceeding the 77.4% estimated by analysts.

Q4 Expectations

For Q4, Vimeo expects revenue of approximately $100 million, above the $97.1 million estimate. Furthermore, it anticipates an operating income around $2 million, significantly better than the $5.55 million loss forecasted by analysts. The company also projects its Q4 adjusted EBITDA to be close to $10 million.

Analyst Reactions

Following the report’s release, analysts at Truist Securities raised their price target on VMEO shares from $7 to $9. “A low valuation, improving execution, strong balance sheet (BS) and secular growth in video consumption keep us positive on VMEO and make the stock compelling for patient investors,” analysts led by Youssef Squali stated.

Piper Sandler analysts also raised their VMEO price target from $5 to $7. While noting that the Q3 print “represents further progress & raising 4Q24 is constructive,” Piper analysts expressed a desire for better visibility on revenue growth before revisiting their overall thesis.