IAC Inc. (IAC): A Bull Case Theory
We came across a bullish thesis on IAC Inc. on High Growth Investing's Substack by Stefan Waldhauser. In this article, we will summarize the bulls' thesis on IAC. IAC Inc.'s share was trading at $ 37.14 as of June 20th. Please note that the original thesis was published in November.
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IAC, a long-standing holding in the author's model portfolio, continues to trade well below intrinsic value, with shares at $47 and a $4.0 billion market cap following its Q3 2024 report. The planned 2025 spin-off of Angi, IAC's home services platform, represents the company's 10th such move and will distribute roughly 5 Angi shares per IAC share. Despite Angi's recent 30% price drop, restructuring efforts under new CEO Jeff Kip have stabilized the business, with an expected 2024 EBITDA of $130–150 million.
Still, Angi trades at a steep discount to its improving fundamentals. IAC's 21.8% stake in MGM—worth ~$2.4 billion—is now its largest asset, growing due to MGM's ongoing buybacks. This alone nearly covers IAC's market cap when combined with $1.1 billion in cash. Thus, all other holdings are effectively valued at zero.
Yet, the unlisted portfolio is substantial. Dotdash Meredith, post-merger with Meredith, is recovering, with 2024 EBITDA projected at $300 million; it could be worth ~$2.2 billion. Turo, the car-sharing leader, may IPO at a $3 billion+ valuation, valuing IAC's 32% stake at ~$1 billion.
Care, acquired in 2020 and profitable, is conservatively valued at $500 million. Vivian Health, EmployBridge shares, and legacy search assets could be worth another $200 million. Collectively, the unlisted assets are estimated at $3.9 billion, implying ~$46/share in hidden value.
The Angi spin-off may reduce structural complexity and better showcase this mispricing. With potential catalysts in 2025, including the Turo IPO or exit, the author remains confident that IAC is primed for a swift re-rating once the market acknowledges its sum-of-the-parts value.
Previously, we covered a bullish thesis on IAC Inc. by Boyar Research in February 2025, which highlighted the company's proven spin-off strategy, management reshuffle, and a renewed focus on capital allocation amid ongoing turnarounds at Angi and Dotdash Meredith. The company's stock price has depreciated approximately 20% since our coverage. This is because Angi's underperformance and market skepticism on restructuring masked the sum-of-the-parts value. The thesis still stands as the spin-off and improved fundamentals at core holdings continue to signal long-term upside. Stefan Waldhauser shares a similar view but emphasizes the extreme undervaluation of IAC's unlisted assets and the potential re-rating post-Angi spin-off and Turo's IPO.
IAC Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 43 hedge fund portfolios held IAC at the end of the first quarter, which was 54 in the previous quarter. While we acknowledge the risk and potential of IAC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
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