Needham & Company Maintains a 'Buy' on Yahoo! (YHOO); Monetizing its Asian Assets?
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Price: $52.58 --0%
Rating Summary:
18 Buy, 21 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
18 Buy, 21 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Needham & Company maintains a 'Buy' on Yahoo! (NASDAQ: YHOO) price target of $19.00.
Needham analyst says, "The New York Times (NYSE: NYT)(Not/Rated) reported yesterday that the Yahoo Board will meet as early as tomorrow (Thursday) to consider selling its Asian assets to their owners for $17B in a tax-free deal, representing about $14/share. If the NYT’s numbers are accurate, this would be a windfall for YHOO shareholders. We had put a value of $7/share on the Asian assets, after a 50% discount for taxes and uncertainty owing to the Alipay asset-transfer incident."
"If YHOO could realize $17B from selling the Asian assets, that would leave only $2.8B of YHOO’s current $19.8B market cap unaccounted for. Since cash and equivalents at 9/30/11 were $2.8B, that would imply that, at current valuation levels, YHOO shareholders would be valued at almost nothing for the US search and display internet advertising businesses. This would be a great outcome for public shareholders. Our target price of $19/share would put a value of the US internet advertising businesses of about $4B ($24B-$20B), representing about 2.4x FY11 and FY12E EBITDA of $1.7B (flat in both years), and might prove conservative."
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 $15.99 yesterday.
Needham analyst says, "The New York Times (NYSE: NYT)(Not/Rated) reported yesterday that the Yahoo Board will meet as early as tomorrow (Thursday) to consider selling its Asian assets to their owners for $17B in a tax-free deal, representing about $14/share. If the NYT’s numbers are accurate, this would be a windfall for YHOO shareholders. We had put a value of $7/share on the Asian assets, after a 50% discount for taxes and uncertainty owing to the Alipay asset-transfer incident."
"If YHOO could realize $17B from selling the Asian assets, that would leave only $2.8B of YHOO’s current $19.8B market cap unaccounted for. Since cash and equivalents at 9/30/11 were $2.8B, that would imply that, at current valuation levels, YHOO shareholders would be valued at almost nothing for the US search and display internet advertising businesses. This would be a great outcome for public shareholders. Our target price of $19/share would put a value of the US internet advertising businesses of about $4B ($24B-$20B), representing about 2.4x FY11 and FY12E EBITDA of $1.7B (flat in both years), and might prove conservative."
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 $15.99 yesterday.
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