Cowen Trims PT on Yahoo! (YHOO) to $32 Following Q4 Results, Outlook, Streamlining
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Cowen and Company lowers its price target on Yahoo! (Nasdaq: YHOO) from $35 to $32 following Q4 results and restructuring plan announced on Tuesday night.
Analyst John Blackledge commented, Although headline numbers in 4Q beat our forecasts, we found little to recommend in this report including 1) deceleration in MAVENs and mobile rev growth; 2) a $4BN Goodwill write-down; 3) workforce retrenchment; and 4) a disappointing '16 Guide which reduced rev / EBITDA 7% / 13%, respectively.
Blackledge commented on guidance: With the business still in transition between legacy and growth formats 1Q16 guidance was set low: net revenues and Adj. EBITDA of $840MM (midpoint) / $110MM (midpoint) compares against consensus $912MM / $186MM going into earnings. For FY '16 net revenue / Adj. EBITDA was set at $3.5BN (midpoint) / $750MM versus $3.8BN / $854MM into the report. Although this guide may be conservative, we are cautious given the number of strategic initiatives underway and the mixed performance of MAVENs and other growth segments. For 1Q16 our est moves to $832MM from $920MM and $113MM from $178MM; FY '16 goes to $3.5BN from $3.8BN and $708MM from $828MM. We trimmed LT est's as well.
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