Their Vimeo subscription helps them attract customers. My photographer brother Bryan has a paid Vimeo account so his events coverage team can upload their debut/wedding/birthday videos/slideshows. The Vimeo brand has long-term loyalists too. VMEO might eventually bounce back to $5 or above if it can surprise with another profitable quarter and a quarterly increase in subscribers. Stock predictions are not an exact science. I guesstimate that it won’t be a profitable entity by end of 2023. Technical indicators are still bearish, so I do not see any near-term upside probability for VMEO. I opine Vimeo is losing money competing in a tiny niche, and a crowded industry. The Video-as-a-Service was estimated by Allied Market Research to be worth only $4.27 billion in 2020. Going forward, Vimeo might suffer more quarters of net losses competing against so many B2C and B2B video platforms. IBM has some enterprise customers that might be amenable to IBM Video Streaming replacing their Vimeo enterprise accounts. IBM Video Streaming could hurt the growth efforts of Vimeo. One of these rivals is mega-cap IBM ( IBM). Vimeo is an 18-year-old company that only has 1.6 million paying subscribers. The other long-term threat is that 18-year-old Vimeo already has many rivals. The EMA indicator is therefore also bearish for Vimeo’s stock. They are all lower than the long-term 50-day EMA of $4.14. These short-term EMA numbers are lower than VMEO’s 20-day EMA of $3.88. The 5-day EMA is lower than the 13-day EMA of $3.80. This is lower than its 5-day EMA of $3.63. It is still above the oversold score of 30. It is well below the neutral score of 50. The Relative Strength Index score of VMEO is bearish at 37.80. I use simple, easy to understand indicators to gauge the broad emotion of investors. The other risks against VMEO comes from technical indicators. It has also failed my growth stock metric that a company should be able to do 18 to 20% revenue growth. It is also fast falling my F-score requirement. VMEO has already failed my profitability factor. The F-score is my top factor when evaluating stocks. Consecutive quarters of net losses is why VMEO’s Piotroski F-score is only 5. There is not much point in Vimeo doing 17% revenue CAGR if it continues to bleed. Having 1.6 million subscribers decline by 3 to 4% per quarter can only be It could lead to a cash shortage problem later. The -22.72% TTM net income margin is just bad for VMEO. This company’s total cash is only $272.87 million. The TTM net operating cash flow is -$50.39 million. Going forward, losing an average of $25 million per quarter could hurt the stock price. The three consecutive months of subscriber losses could worsen the quarterly losses. It is perplexing that Vimeo is improving its ARPU and yet it continues to report quarterly losses. Divide this by 1.6 million subscribers and the average annual revenue per user or subscriber is $271. My takeaway is that after Vimeo has been around since 2004, it should have matured enough to be a consistent money maker.Īs of Q3 2022, Vimeo has 1.6 million subscribers. The full year outlook is that Vimeo will have an operating net loss between $100 million and $103 million. Post-IPO, Vimeo’s accumulated net losses are now $130.6 million. Profitability is an especially important factor when I analyze stocks. Its 18-year-old brand power/recognition should inspire management to try reducing that TTM $105.5 million cost of revenue. Vimeo’s TTM revenue is only $433.6 million and yet its TTM operating expenses are $426.6. My takeaway is management needs to reduce operating costs and cost of revenue. I think VMEO is a sell because it reported five consecutive quarterly net losses since May 2021 IPO. Vimeo had a net income of $3 million FQ1 2021. It displeases me that Vimeo has only one quarter of profitably since Q1 2020. My sell recommendation for VMEO is also due to its prevailing unprofitability. You should avoid VMEO because the massive fall from $57 to $3.46 has not erased its slight relative overvaluation against its Communications sector peers in my view. The negative momentum of VMEO could worsen further if management reports subscriber losses for FQ4 2022. Vimeo’s subscriber count fell 3% in October and 1% in September. The sad news that Vimeo has lower revenue and lost 4% subscribers in November might only aggravate market negativity against VMEO. Please do not average down on this stock. It reinforces the nightmare 1-month (-21.18%), 3-month (-31.18%), and 6-month (-49.20%) falling IPO angel status of VMEO. The 1-week price performance of VMEO is -7.98%. I opine this B2B and B2C video sharing/hosting platform company will continue its decelerating momentum. ( NASDAQ: VMEO) is far below its closing price of $57. The most recent closing stock price of $3.46 of Vimeo, Inc.
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