Vimeo Surges to 2-Year Peak After Strong Q3 Results Prompt Price Target Increases: Retail Sentiment Remains Optimistic

Vimeo Inc. ($VMEO) shares surged over 44% to $6.96 on Tuesday, reaching a two-year high. 

The spike followed increased price targets from analysts after the video technology company reported strong third-quarter earnings that surpassed Wall Street expectations.

The company reported earnings of $0.05 per share, significantly surpassing analyst forecasts of $0.01. Although revenue fell 1.4% year-over-year (YoY) to $104.56 million, it still beat the estimated $99.48 million by 5%. 

While revenue from the Self-Serve segment fell by 6% compared to the same period last year, management expects both revenue and bookings to increase in fiscal year 2025 in its earnings call.

For the fourth quarter, Vimeo anticipates fourth-quarter revenue to be around $100 million. 

Piper Sandler analyst Thomas Champion raised the price target for Vimeo to $7 from $5 while maintaining a ‘Neutral’ rating on the stock. 

“Enterprise remains a bright spot,” noted the brokerage, citing Vimeo's current valuation as about 3.8 times its expected bookings in the fourth quarter of fiscal 2025. Vimeo Enterprise accounted for 25% of the total bookings. 

TD Cowen also raised its price target for Vimeo to $7 from $6 while maintaining a ‘Hold’ rating on the shares. 

The brokerage noted that Vimeo’s robust financials were driven by its 26% increase in subscribers alongside the 11% increase in average revenue per user (ARPU) over the last year.

Truist has a more bullish ‘Buy’ rating on the stock and upgraded its price target to $9 from $7. 

Retail sentiment for the stock on Stocktwits is currently at an 'extremely bullish' (96/100), with message volume also peaking at (96/100). This marks the second time this year that sentiment has reached this level and reflects the highest chatter in the past year.

Vimeo’s stock was among S&P 500 ($SPY) top 10 gainers on Tuesday. 

The company has seen an 83% increase in its share price so far in 2024.

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