After the market closed on Monday, internet conglomerate InterActiveCorp (IAC 1.42%) reported its first-quarter earnings. At the same time, CEO Joey Levin released a shareholder letter that outlined several things, including the progress its various businesses are making, a recent investment in one of its subsidiaries, and IAC's capital allocation plans.

A closer look at what the company reported suggests that it's making great progress. With the stock price down about 44% year to date, now could be a great time to buy some shares. Let me explain.

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Revamping Meredith

The largest operating subsidiary of IAC is Dotdash Meredith. It acquired Meredith's publishing business, which consists of various magazine and website brands, for $2.7 billion late last year, and combined it with its Dotdash online publishing business. The combined company owns brands like Investopedia, Better Homes & Gardens, and Southern Living

In Q1, Dotdash Meredith's revenue declined by 6% year over year to $501 million. This might sound concerning, but it's actually part of IAC's plan for the next few quarters. It shut down some of Meredith's underperforming print magazines and is revitalizing the Meredith websites for a different advertising model. This will cut into revenue in the short run, but optimize the business for better performance over the long term.

For example, in the shareholder letter, Levin outlined the improvements made to Meredith website After the revamp, the website now loads five times faster and has 30% fewer advertisements. The ad reduction meant a short-term hit to revenue, but because of the better advertising yields under Dotdash's model, the lost revenue was recovered within a week.

IAC expects Dotdash Meredith to generate $300 million in adjusted EBITDA in 2022 and has a goal for it to generate $450 million in 2023. Considering its current market cap of around $7 billion, that earnings stream could create a lot of value for shareholders in the coming years.

Vivian investment ... and don't forget Turo

The other big news for IAC in the quarter was an outside investment in its Vivian Health subsidiary. The healthcare professional marketplace received a $60 million investment from outside investors and IAC that valued the business at $400 million and brought IAC's now-majority stake in it to a value of approximately $300 million. On total capital deployed of only $20 million, that's a nice little return for IAC shareholders.

The Vivian Health business is still at an early growth stage, so it has a lot left to prove, but this investment does show how adept IAC's team is at building and growing internet brands.

And let's not forget about Turo, the car rental marketplace that IAC invested $250 million into back in 2019. That company is preparing to go public sometime this year, which could significantly increase the value of IAC's 27% stake in the business. However, there is a lot of uncertainty around the timing of the IPO and what value the market will put on Turo. 

Plenty of dry powder left

At the end of Q1, IAC had $1.9 billion in cash on its balance sheet. With valuations down sharply and still falling for companies across the internet and technology sectors, Levin and his team may have opportunities to deploy some of that cash to invest in new businesses at bargain prices. In fact, here is what Levin had to say on that subject in the Q1 shareholder letter:

Though we found phenomenal opportunities over the last few years, we expect the current environment to offer the most fertile ground we've seen in a while.

This should be music to shareholders' ears. Reading IAC's latest shareholder letter and seeing the smart investments its executive team has been making keeps me confident about the long-term trajectory of this stock. Investors today have a chance to buy a stake in what looks to be a long-term winner at a discounted price