I’ve written a decent amount about Yahoo in the past few years and even more frequently in the past year. It’s not a coincidence that it started when Marissa Mayer accepted to become the latest Yahoo CEO. It was a very welcome event after an incredibly frustrating sequence of events for the purple company. There’s no doubt about it, I’ve loved the energy and passion that she brought to Yahoo and from nearly every perspective, it’s looking like a home run. I mean, just take a look at Yahoo’s stock in the past 12 months or so… this includes yesterday’s 10% gain following the latest earnings release:
We’re not talking about some kind of high growth startup here. This is a company that was well on its way to becoming irrelevant. Here is a 10 year chart:
Yahoo also seems to be (finally) working on improving some of its key products such as Flickr, Yahoo mail, its mobile products and has reinforced its relationship with partners and users.
There’s Just One Thing….So Yahoo shareholders LOVE Marissa Mayer and everything that she’s been doing. Yesterday, Yahoo’s stock shot up 10% following the earnings release. Was it partially because seeing her present in a Yahoo first live video earnings call convinced everyone that things are headed in the right direction? The one big “but” here is that the numbers don’t quite support this turnaround. Let’s take a look at a few:
Revenues are fairly flat and actually slightly down compared to Q2 last year:
Expenses are slightly up:
So of course, profits are slightly down:
So yes, things are getting better but numbers are certainly not reflecting that …Yet. Of course, no one in their right minds would have expected a quick turnaround. The downward momentum was simply too strong. That being said, it’s hard to justify buying a stock that has increased over 100% without any actual change in revenues or earnings trends. Some other numbers are more positive but overall, the picture is fairly “flat”. I do believe in Mayer but that argument only goes so far doesn’t it?
Let’s look at the numbers:
|Ticker||Name||Price||EPS||PE Ratio||PE Next Year||Return YTD||Sales Growth||Analyst rating||Book Value||Beta||Revenue/Share||Sales 5Y Avg Growth||EPS 5Y Avg Growth|