Yahoo! (YHOO) Core 'Muted' in Q1,Cantor Fitzgerald; Maintains 'Buy' on SOTP

Cantor Fitzgerald analyst Youssef Squali reiterated a Buy rating and $60 price target on Yahoo! (NASDAQ: YHOO) following Q1 results noting continued challenges to the core business but an attractive SOTP valuation.

Squali commented, "Muted 1Q results reflect challenges Yahoo! is facing, especially in Display, as declines in legacy revenues more than offset growth in new streams (Mavens). The deal with Mozilla and amended partnership with Microsoft should be a tailwind for search revenue, prompting mgt to "guide" to growth in GAAP revenue for 2015, in our view, but growth in non-GAAP revenue remains hazy as PC revenue declines and higher TAC pressure net revenue growth. Our BUY rating and $60 PT (unchanged) is predicated on 1) modest performance in core, augmented by 2) a compelling SOP, including Y!J, for which Yahoo! has now hired advisors to explore best ways to maximize value, and 3) a massive buyback ($2.7B).

For an analyst ratings summary and ratings history on Yahoo! click here. For more ratings news on Yahoo! click here.

Shares of Yahoo! closed at $44.49 yesterday.

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