According to a recent Cantor’s report, analysts Youssef Squali, Kip Paulson and Naved Khan believe Yahoo’s third-quarter results will probably be “benign, in line with muted expectations.”
Within the core operations, investors should focus on display ad revenue growth, which turned positive in the last reported quarter (on an ex-TAC basis) for the first time since the first quarter of 2014. However, the analysts at Cantor noted they need further confirmation to be convinced the progress is sustainable.
Challenges Remain
They noted that, despite the “early success with the MVNS initiatives and a long honeymoon period with the CEO,” the company overall “remains challenged to keep up with growth in an industry that's innovating faster.”
Having said this, they added that the stock remains cheap from a sum of the parts standpoint. Nonetheless, the main catalyst continues to be the Alibaba spinoff and its tax treatment. Consequently, investors need further clarity on the issue to properly assess the investment.
Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.
Image Credit: "Yahoo 701 First Avenue" by Sebastian Bergmann - originally posted to Flickr as Yahoo!. Licensed under CC BY-SA 2.0 via Wikimedia Commons© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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