UPDATE: Piper Jaffray Initiates YY at Neutral on Valuation
Piper Jaffray initiated coverage on YY (NASDAQ: YY) with a Buy rating and a $15 price target.
Piper Jaffray noted, "YY is rich communication social platform that offers real-time voice, text, and video interactions. It monetizes through value added services (gifts and in game purchases) and advertising revenue (mostly through gaming portal). YY claims 401m registered users and ~1.8m paying users. We initiate shares with a Neutral rating and $15 price target based upon 12X our FY13 EV/EBITDA estimate. Our 12x multiple is based upon a ~50% discount to YY's peer group. We believe this discount is justified based upon the risk presented by its brief operating history and size in comparison to peers."
YY closed at $13.65 on Friday.
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