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Vimeo: Changing For The Better

May 02, 2022 10:03 AM ETVimeo, Inc. (VMEO)7 Comments
Felix Fung profile picture
Felix Fung


  • Vimeo stock is now down over 80% since its IPO.
  • Management is trying to re-accelerate growth by shifting their focus to enterprises and broadening their product offerings.
  • Their latest acquisition of Wibbitz and Wirewax is being overlooked and will provide substantial value to Vimeo's platform.
  • A successful business transformation will put Vimeo in a much stronger position and result in a significant valuation expansion.
  • It is now one of the cheapest SaaS stocks trading at an EV/sales ratio of 3.7, which provides a good buying opportunity.

Chicken + Egg Pictures + Vimeo Present A Celebration of Women in Film

Monica Schipper/Getty Images Entertainment

Investment Thesis

Since its IPO last year, Vimeo (NASDAQ:VMEO), a leading video company has been dropping non-stop. The stock dropped from $51 last July to $9.87 at the current moment. This is partly due to the ongoing market

This article was written by

Felix Fung profile picture
Individual investor with four-year experience. I focus on long-term investing opportunities around companies with high-quality fundamentals or compelling turnaround potential. Currently studying business and economics at the University of New South Wales. Appreciate any feedback and comments.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (7)

The Real Ace Ventura profile picture
Would they be attractive for acquisition?
arcfast1 profile picture
A lot will be riding on the monetization model... based on how its been executed last quarter, it's difficult to foresee substantial revenue growth this year. I'd say a hold at best. In current macro conditions, the stock price will fall below $6.
Jordan Martenstyn profile picture
I echoed a similar sentiment back in December 2021 in this article here (although I was overall less bullish): seekingalpha.com/...

The turnaround story sounds promising, but management has lost a lot of credibility after backtracking on guidance this early into their journey as a public company. They re-iterated a 30% revenue CAGR in mid-2021 to follow up the following growth rates:

Q4 2021: 27% revenue growth
Q1 2022: 21% revenue growth
Q2 2022 (forecasted): 12-14% revenue growth

Sales-assisted revenue (i.e. enterprise revenue) has also decelerated from 100% growth in mid-2021 to 50% growth in the current quarter. This deceleration also coincides with a period of increased investments into product development, and sales and marketing. Not a great time to be increasing losses while also reporting decelerating revenue growth ...
oof that net loss number keeps increasing.
Thanks for all your work on this. I started a modest position after Nov'21 but still almost 100% higher than now, so looking to average down soon, for the long haul.
Excellent write-up. The company is quite interesting and the upside huge if they execute well. The CEO is also quite talented, with the right focus and great leadership.
Worth a look.
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