19th July 2010. Recent upgrade from Thinkequity. Personally I dont believe in upgrades. Looking at the fundamentals.
Market Capitlisation $20.91bn
Sales $6,400 Dec 2009. $6,400 December 2006. So between 2006 and 2009 Yahoo has not increased sales.
Net underlying earnings $724m Dec 2009. $736m Dec 2006.
PE ratio based on underlying earnings 28.9
The only growth in earnings has been in March 2010 of a mere $0.2bn.
Google PE ratio is 19. Sales December 2009 = $23,650. Sales December 2006 $10,640.
Typically I would say that a short on Yahoo would be worth it.
Revenues are expected to be $1,160bn. Earnings per share around 14c.
Expected revenues have already been reduced to take account of Yahoo's loss of market share, so there could be an easy beat, prompting uneducated investors into the share.
However I cant see how the valuation stands up in comparison to its peer group given the lack of growth.