Yahoo lands two upgrades; Bernstein values Alibaba at $245B

"Holy Alibaba!" exclaims Bernstein's Carlos Kirjner after looking at the Q4 numbers disclosed by Yahoo (YHOO +5.7%) yesterday.  He now values the Chinese e-commerce giant at $245B - 25x estimated 2016 earnings of $9.5B for its core Taobao and Tmall sites + a $7.5B valuation for and Alipay. Taobao/Tmall profits are now expected to grow 41% in 2015, and 28% in 2016.

Wells Fargo and Gabelli have upgraded Yahoo: The latter calls shares "ready for takeoff" as hype surrounding Alibaba's (ABABA) IPO - an F-1 reportedly could arrive by Monday - continues growing.

Looking at Yahoo itself, UBS (Buy) is pleased with the top-line impact of the company's in-stream ads (now 20% of display ad volume). It's less happy with Yahoo's vague CC remarks (transcript) about the tax impact of Alibaba share sales and future cash returns, EBITDA weakness (due to growth investments), and high headcount.

SunTrust (Buy) observes rising mobile ad sales (along with in-stream and premium ads) helped display impressions rise 7%, and that the Americas (where new ad products have been launched first) is outperforming.

Marissa Mayer mentioned on the CC Yahoo's news app is respectively ranked #1 and #2 in the news app category on the App Store and Google Play, that most mobile search metrics rose nearly 100% Y/Y, and that video streams (boosted by the Olympics and recent content deals) rose 30% Q/Q.

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Comments (4)
  • Pete P.
    , contributor
    Comments (1019) | Send Message
    I think $245 is a little high. You an see the profit approaching $10 billion and maybe it could happen sooner than later. We'll see.
    16 Apr 2014, 02:30 PM Reply Like
  • bigguylitt
    , contributor
    Comments (3) | Send Message
    YHOO is going to be the Best for get the rest
    20 Apr 2014, 10:48 PM Reply Like
  • sunnyeh1
    , contributor
    Comments (19) | Send Message
    at $245 B, Yhoo's remaining 16.5% is worth about $42 a share before you add the rest of YHOO....only the slight uptick in sp suggests they don't believe it either....


    FB has a P/E of 80+...applying the same P/E to BABA and then reflecting on YHOO sp, YHOO should be approaching $75....pretty agressive but can someone argue why BABA wouldn't deserve a P/E the same as FB?
    5 Sep 2014, 01:29 PM Reply Like
  • Pete P.
    , contributor
    Comments (1019) | Send Message
    You probably can't argue that at all. Ali should deserve a higher P/E, but it may not get it. With Ali's cash flow, you can see it trading up to a market cap of $300 billion pretty quickly, especially with growth potential. Let's see what happens. Yahoo at $75 is probably reasonable some time in 2015, provided they show revenue growth.
    6 Sep 2014, 12:14 PM Reply Like
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