What happened

Shares of Vimeo (NASDAQ:VMEO) were moving higher today after the cloud-based video-sharing platform posted solid numbers in its monthly metrics report for September and Jefferies issued a bullish note on the tech stock.

As of 10:36 a.m. EDT, the stock is up 12.5%.

A person watching a streaming video on a tablet.

Image source: Getty Images.

So what

Vimeo said that revenue grew 33% in September, subscribers increased by 14%, and average revenue per subscriber was up 16%. While that revenue growth rate only matched its August growth, and the stock actually fell when it reported August results, this time around investors seemed to interpret the numbers as a sign that the recent revenue slide was stabilizing. The September increase also comes after revenue jumped 49% in September 2020, compared to just 43% growth in August 2020. That shows that on a two-year stacked basis, the business's growth is actually accelerating.

Separately, Jefferies analyst Brent Thill this morning called Vimeo stock a "compelling buy" under $30 and said the September results imply a 34% revenue growth rate for the third quarter, above the consensus of 32%. Thill also said the video platform's growth was still in its "early innings." He maintained a buy rating on the stock and a price target of $54.

Now what

Vimeo stock has struggled since it was spun off from IAC in May, but the September numbers should give investors some confidence that the company's growth is starting to stabilize around 33%, which is still an attractive growth rate, especially for a company chasing a large addressable market.

With its subscription model and focus on small businesses and creators, Vimeo has distinguished itself from YouTube, leaving it with relatively little competition in its subsector of video. Though the company is not yet profitable, the growth path in front of it is appealing.

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