What Happened?

A number of stocks jumped in the afternoon session after markets continued to rally as investor optimism grew for a potential Federal Reserve interest rate cut in September. This optimism was largely fueled by a recent consumer price index report that showed inflation easing, along with public comments from Treasury Secretary Scott Bessent advocating for a significant 50-basis-point rate cut. The prospect of lower borrowing costs tends to boost rate-sensitive sectors like Business Services, as it can encourage companies to increase spending on consulting, IT projects, and staffing.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• IT Distribution & Solutions company ePlus (NASDAQ: PLUS) jumped 3%. Is now the time to buy ePlus? Access our full analysis report here, it’s free.
• IT Distribution & Solutions company ScanSource (NASDAQ: SCSC) jumped 4.7%. Is now the time to buy ScanSource? Access our full analysis report here, it’s free.
• Data & Business Process Services company TransUnion (NYSE: TRU) jumped 4.5%. Is now the time to buy TransUnion? Access our full analysis report here, it’s free.
• Digital Media & Content Platforms company Vimeo (NASDAQ: VMEO) jumped 6.3%. Is now the time to buy Vimeo? Access our full analysis report here, it’s free.
• IT Services & Consulting company Accenture (NYSE: ACN) jumped 3.2%. Is now the time to buy Accenture? Access our full analysis report here, it’s free.

Zooming In On Vimeo (VMEO)

Vimeo’s shares are somewhat volatile and have had 12 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 8 days ago when the stock gained 8% on the news that the company reported strong second-quarter earnings that far surpassed analyst expectations. The video platform posted a profit of $0.04 per share, which was a significant beat compared to the loss Wall Street had anticipated. While total revenue was nearly flat year-over-year, investors latched onto key growth metrics. The company announced a 6% rise in total bookings, its highest in three years, driven by a 25% jump in revenue from its enterprise segment. This robust performance from corporate clients offset a decline in self-serve subscribers. Based on these results, Vimeo raised its full-year adjusted EBITDA guidance to $35 million.

Vimeo is down 37.2% since the beginning of the year, and at $4.07 per share, it is trading 44.4% below its 52-week high of $7.32 from December 2024. Investors who bought $1,000 worth of Vimeo’s shares at the IPO in May 2021 would now be looking at an investment worth $74.00.

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