Needham & Company Maintains a 'Buy' on Yahoo! (YHOO); Internet Usage-What’s Changing?
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Price: $52.58 --0%
Rating Summary:
18 Buy, 21 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
Rating Summary:
18 Buy, 21 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
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Needham & Company maintains a 'Buy' on Yahoo! (NASDAQ: YHOO) price target of $19.00.
Needham analyst says, "In this report, we analyze a 112,000 person dataset of leisure time usage trends between 2003 and 2010. What’s changing?...Leisure time spent online grew 20%/year between 2008 and 2010, after being flat for 5 years....People who report spending any leisure time online has grown by 10%/year over the past 24 months....Socializing, relaxing and thinking are the biggest categories losing share to online leisure. Since these activities were free in the offline world, this may partly explain why consumers strongly prefer online leisure substitutes to be free....Online, more time is being spent in closed systems like Apple and Facebook. The share losers are from the open web, such as portals and search. We believe the web is maturing and that monetization growth will come from business model innovation on proprietary platforms....Although 15-17 year-olds report the most minutes of online leisure, the data show that their leisure time online has been decreasing since 2007. Also, the 15-24 year old age groups consume more TV than anyone under 45."
"Our stock recommendation from this work is Yahoo owing to its ability to aggregate audiences. As more people shift time online, the companies best positioned to monetize this trend are companies that aggregate audiences. Today, advertisers are trying to shorten the list of companies they pay online. Yahoo is a beneficiary of this trend. In addition, we believe there is event upside from the sale of Yahoo, in whole or in parts. Finally, valuation appears inexpensive at 3.7xEV/2012E EBITDA and a required EBITDA growth rate of negative 8% for the next 10 years implied by the current share price."
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 $16.00 yesterday.
Needham analyst says, "In this report, we analyze a 112,000 person dataset of leisure time usage trends between 2003 and 2010. What’s changing?...Leisure time spent online grew 20%/year between 2008 and 2010, after being flat for 5 years....People who report spending any leisure time online has grown by 10%/year over the past 24 months....Socializing, relaxing and thinking are the biggest categories losing share to online leisure. Since these activities were free in the offline world, this may partly explain why consumers strongly prefer online leisure substitutes to be free....Online, more time is being spent in closed systems like Apple and Facebook. The share losers are from the open web, such as portals and search. We believe the web is maturing and that monetization growth will come from business model innovation on proprietary platforms....Although 15-17 year-olds report the most minutes of online leisure, the data show that their leisure time online has been decreasing since 2007. Also, the 15-24 year old age groups consume more TV than anyone under 45."
"Our stock recommendation from this work is Yahoo owing to its ability to aggregate audiences. As more people shift time online, the companies best positioned to monetize this trend are companies that aggregate audiences. Today, advertisers are trying to shorten the list of companies they pay online. Yahoo is a beneficiary of this trend. In addition, we believe there is event upside from the sale of Yahoo, in whole or in parts. Finally, valuation appears inexpensive at 3.7xEV/2012E EBITDA and a required EBITDA growth rate of negative 8% for the next 10 years implied by the current share price."
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 $16.00 yesterday.
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