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Yahoo! Shares Powered by Panama

01/24/07 - 01:58 PM EST

Vishesh Kumar

A Thomson Financial analyst estimate was expecting revenue of $1.26 billion for the first quarter and $5.47 billion for the full year.

That forecast coincided with the report that fourth-quarter revenue rose only 15% excluding costs, after rising 36% year over year in the prior fourth quarter.

But some investors took Yahoo's guidance with a grain of salt. "We believe guidance is conservative, especially on implied spending and sets up upward revisions through the year," wrote American Technology Research analyst Rob Sanderson in a note to clients on Wednesday.

Sanderson, who upgraded his price target to $37, says the stock may be ready to move upward as investors see more positive signs over the horizon. "With a low bar on guidance, easy comparables and the most significant growth catalyst in years now only weeks away, we believe the stock will be a great performer in 2007."

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