Here's Why Vimeo Stock Absolutely Skyrocketed Today

Core Viewpoint - Vimeo's stock surged 42% following the release of its Q3 2024 financial results, reaching its highest price in over two years, despite a slight decline in revenue [1]. Financial Performance - In Q3, Vimeo's revenue decreased by almost 2% year over year, while the gross margin remained stable at 79%. The net income increased to $9 million from $8 million in the previous year [2]. - The company has successfully cut expenses, leading to record highs in earnings per share (EPS) and free cash flow [3]. Growth Potential - Although overall revenue is down, Vimeo's enterprise product is experiencing significant growth, with bookings for the enterprise platform increasing by 39% in Q3, now representing 25% of total bookings [4]. - The stock was previously undervalued, trading at two times its sales and about 16 times its free cash flow, which may have been justified for a declining business. However, if the enterprise-video platform continues to grow, the current valuation could be considered cheap [5]. Future Outlook - The key factor for Vimeo's future success is its ability to profitably scale its enterprise platform, which could lead to further stock price appreciation [6].