NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, good cash flow from operations, growth in earnings per share and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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Highlights from the ratings report include:
- YHOO's revenue growth trails the industry average of 23.2%. Since the same quarter one year prior, revenues slightly increased by 0.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Net operating cash flow has increased to $297.45 million or 42.75% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 15.30%.
- YAHOO INC has improved earnings per share by 35.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, YAHOO INC reported lower earnings of $0.82 versus $0.90 in the prior year. This year, the market expects an improvement in earnings ($0.95 versus $0.82).
- The gross profit margin for YAHOO INC is currently very high, coming in at 79.20%. Regardless of YHOO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 23.40% trails the industry average.
Yahoo! Inc., together with its subsidiaries, operates as a digital media company that delivers personalized digital content and experiences through various devices worldwide. It offers online properties and services to users; and a range of marketing services to businesses. The company has a P/E ratio of 17.6, equal to the average internet industry P/E ratioand equal to the S&P 500 P/E ratio of 17.7. Yahoo has a market cap of $18.97 billion and is part of the
industry. Shares are down 3.2% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.