Piper Jaffray Remains Bullish on Yahoo! (YHOO) Despite Continued Headwinds

Piper Jaffray maintained an Overweight rating on Yahoo! (NASDAQ: YHOO), and cut the price target to $31.00 (from $39.00), following the company's 4Q earnings report. Yahoo! reported Q4 ex-TAC revenue of $1.00B, 5% ahead of the Street at $948M. However, the company guided Q1 net revenue down 8% to $820-860M and CY16 net revenue down 9% to $3.4-3.6B. Yahoo! management stated that it continues to explore a reverse spin after abandoning the previous Aabaco spin last year. CFO Ken Goldman stated he still expects to complete a reverse spin later this year.

Analyst Gene Munster commented, "We maintain our Overweight rating on YHOO given that shares still trade below a fully taxed value for both Alibaba and Yahoo! Japan, but note that the core seems even more challenged than before. Current share prices seem to imply zero value for the core, which we view as unfair given Verizon's $4.4 billion acquisition of AOL last year. While the company announced a 15% headcount reduction as expected given media reports yesterday as well as an outline to refocus the company, we believe the fundamental growth challenges will remain for multiple years. Despite the negative environment around the company itself, we continue to believe shares have limited downside outside of a significant devaluation in BABA. Given we believe BABA still provides upside to the story, we reitierate our OW rating."

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 $29.06 yesterday.

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