Citi Research analyst Mark Mahaney loves Yahoo right now, and has upgraded its stock to a buy. In a note, he calls the company a “Turnaround/Value Play” for 10 reasons.
We’ve paraphrased them here.
- Yahoo’s shares have underperformed all Large Cap Internet stocks.
- Over the last three years, Yahoo’s share of overall Internet usage minutes remained at 12%-13%.
- Yahoo.’s share of the display ad market appears to have stabilised over the last three quarters.
- Yahoo’s share of U.S. Search queries has held flat for the past 8 months.
- New CEO Carol Bartz is kicking arse. “Bartz’s workforce reductions, organizational realignments, and CFO selection have all added to improved management focus.”
- Yahoo remains the only attractive acquisition target for anyone who wants scale in Internet advertising.
- Yahoo is launching a new homepage later this year and it’s going to be totally awesome for users.
- It might also “generate a material new revenue opportunity,” something Mahaney calls “Micro-Transapptions.”
- There will be a cyclical recovery in Internet Advertising.
- If Yahoo stock were priced at 9x 2010 EBITDA — a small premium over the average pricing multiple for the rest of the Large Cap Media stocks out there — it would be 30% more expensive.
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