Piper Jaffray's Gene Munster: Still Room For Upside In Yahoo's Shares

Piper Jaffray’s Gene Munster feels that Yahoo! Inc. YHOO shares could be worth more if the valuation of the company’s core business is done keeping in perspective the valuations that some of the recent successful tech start-ups have got.

Munster was on CNBC to talk about Yahoo’s valuations and whether keeping stake in Yahoo! Japan will help Marissa Mayer.

Still Room For Upside 

“Yahoo! Japan is about 10 percent of what’s left in their core," Munster said. "When you again strip out Alibaba, the core is worth almost nothing at this point and so if we assume that there’s a $5 billion valuation on the core, you get to a $50 stock. That would imply, keep that in perspective that Instagram is rumored to be a $30 billion…it’s really not giving Yahoo core really much credit. There’s still room for upside in the overall shares."

Does Holding On To Yahoo! Japan Gives Marissa Mayer Some Cushion To Turn The Core Business Around?

“It does," Munster replied. "I mean she has had two huge gifts, the biggest one obviously Alibaba then Yahoo! Japan to try to give her more time to really build the mobile business and the core and so, I think it still lacks some of the spark that is going to get the average consumer excited about Yahoo. So, there’s still some work to be done there."

Shouldn’t The Valuation Of Uber, SnapChat, Pinterest Influence The Valuation Of Yahoo’s Core Business?

“There are big numbers out there, but unfortunately one of the things all those have an experience that is something that is exciting for consumers - they have got some impressive growth. If you look at Yahoo’s core it’s still declining, the mobile part is growing, but the desktop part is declining," Munster answered.