Earnings Preview: Yahoo! Inc

| About: Yahoo! Inc. (YHOO)

Company Profile

Yahoo! Inc., together with its subsidiaries, operates as a digital media company that delivers personalized digital content and experiences through various devices worldwide. It offers online properties and services to users; and a range of marketing services to businesses.

Yahoo! (NASDAQ:YHOO) is scheduled to report its second quarter earnings results on July 17, 2012, after market close.

Technical Overview

click to enlarge all imagesClick to enlarge

Yahoo! has a market cap of $19.34 billion and it is currently trading around $15.82 with a 52 week range of $11.09 to $16.79. The following table provides the key financial ratios for Yahoo!:

Key Ratio Value
Current Ratio 3.25
PEG 1.25
P/E 17.98
Forward P/E 14
Profit Margin 11.19%
Return On Assets (ROA) 3.74%
Return On Equity (ROE) 8.67%
Click to enlarge

Recent News

  1. On July 6, 2012, Yahoo! and Facebook (NASDAQ:FB) announced that they have entered into definitive agreements that will launch a new advertising partnership, extend and expand distribution arrangements, and settle all pending patent claims between the companies.
  2. On June 28, 2012, Yahoo! announced an agreement that will enhance the way music, as well as entertainment news and information, is delivered across digital platforms in the U.S. The multi-faceted relationship involves the distribution and cross-promotion of premium content in addition to a live concert series to the unparalleled combined audience of the Yahoo! Media Network.
  3. On June 26, 2012, Yahoo! announced a global content distribution and promotion agreement that will enable Yahoo! to integrate and promote Spotify's on demand music service on Yahoo!'s Media Network, which reaches nearly 700 million unique users monthly - over 47% of the total worldwide Internet audience.
  4. On June 18, 2012, Yahoo! announced that it has appointed Michael Barrett as Executive Vice President and Chief Revenue Officer. Barrett will be responsible for Yahoo's advertising revenue and operations globally for the company, with Americas, EMEA and APAC regional leads reporting to him.
  5. On June 13, 2012, Yahoo! and CNBC announced a strategic alliance that will dramatically expand CNBC's online reach and presence and provide a broadcast platform for Yahoo! Finance's original content and contributors.
  6. On May 24, 2012, Yahoo! announced the availability of Yahoo! Axis, a new experience that re-imagines how people search and browse on the web.

Analyst Guidance and Earnings History

The second quarter revenues are expected to be $1.09 billion when compared to $1.08 billion for the same quarter last year. Earnings per share for the second quarter are expected to be 23 cents a share, up from 18 cents a share in the year-ago period.

The average price target from analyst for Yahoo! is $17.95 with average rating is HOLD

Out of the last 4 quarters, Yahoo! has met or exceeded the EPS estimates all the 4 times. The following chart shows the analyst estimates history and the actual EPS results:Click to enlarge

The following chart shows the annual summary of sales and net income for Yahoo!:Click to enlarge


Google (NASDAQ:GOOG), Baidu (NASDAQ:BIDU), AOL and Microsoft (NASDAQ:MSFT) are considered as major competitors for Yahoo! and the table below provides the key metrics for these companies:

Click to enlarge

Sources: Some of the data is taken from Google Finance, Yahoo Finance, Nasdaq, Finviz and investor sites.


I have no positions in any stocks mentioned, but may initiate a long position in AOL, BIDU, FB, GOOG, MSFT over the next 72 hours.

Additional Disclosure: I change my positions very frequently and may initiate either long or short positions in the above mentioned stocks at any time.

Disclaimer: I am not a registered investment advisor and do not provide specific investment advice. The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. It is up to investors to make the correct decision after necessary research.