10 Best Emerging Tech Stocks to Buy Now

2. Vimeo Inc. (NASDAQ:VMEO)

Market Capitalization as of September 11: $830.66 million

Number of Hedge Fund Holders: 27

Vimeo Inc. (NASDAQ:VMEO) is a video-sharing platform trusted by 287 million creatives, entrepreneurs, and businesses for creating, managing, sharing, and viewing stunning videos. It offers features like video hosting, streaming, and analytics.

In the second quarter of 2024, Vimeo Inc. (NASDAQ:VMEO) grew its revenue by 2.50%, driven by strength in Vimeo Enterprise, which posted 55% revenue growth. Total revenue recorded was $104.38 million, which was $4.93 million higher than Street estimates.

The company’s Self-Serve business, while showing marginal improvement, had a 9% year-over-year decline. To address this, it reduced paid marketing spending by half and is focusing on improving automation and AI integration within the platform.

Despite a 50% marketing budget cut, the Self-Serve business saw only a minor decline. The user base includes growing segments: creators (~20%), digital marketers (~40%), e-learning professionals (~17%), and OTT/SVOD enthusiasts (~20%).

The company also repurchased approximately 4 million shares, utilizing $15 million in capital in Q2. 27 hedge funds are long in Vimeo Inc. (NASDAQ:VMEO) as of June 30, with a total number of 15,731,386 shares. The highest stake is held by Lynrock Lake, with a position of $58,678,070.

Philip Moyer, the company’s Chief, emphasized the company’s advantageous position in the rapidly expanding video market (~82% of the internet is video), noting the substantial growth in video formats, content volume, and the number of creators. The company’s Self-Serve business caters to a thriving demographic of individual creators, marketers, and learners. Such enhancements position the company for substantial growth.

Longleaf Partners Small-Cap Fund made the following comment about Vimeo, Inc. (NASDAQ:VMEO) in its Q2 2023 investor letter:

“We exited Vimeo, Inc. (NASDAQ:VMEO) and long-term position Lumen in the quarter, both of which were disappointing investments that resulted in a permanent capital loss in the portfolio. At Vimeo we initially misjudged how much of a COVID beneficiary the business had been, and our sum of the parts valuation proved to be too generous for some of the underlying assets that were less differentiated than we originally believed.”