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NEW YORK (TheStreet) -- Yahoo! (YHOO) 2015 earnings estimates were lowered to $0.18 from $0.37 per share at Cantor Fitzgerald, with 2016 earnings estimates cut to $0.31 from $0.43 per share.

The firm maintained its "buy" rating and $56 price target on the stock.

Cantor Fitzgerald noted that they lowered the price target to reflect their adjustment to Alibaba's (BABA) - Get Alibaba Group Holding Ltd. Report price target to $95 from $110.

Yahoo! announced plans earlier this year to spin off its stake in Alibaba into an independent investment company called Aabaco Holdings, Inc.

Also, the firm noted that to match today's Yahoo! share price, Alibaba's spin off needs to be taxed at 38%, and no further upside in Alibaba's share price would be expected. 

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"We believe this is a very bearish scenario, offering a meaningful margin of safety for patient investors," Cantor Fitzgerald analysts said.

Shares of Yahoo! are dropping 0.76% to $35.42 in afternoon trading on Wednesday.

Separately, TheStreet Ratings team rates YAHOO INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate YAHOO INC (YHOO) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • YHOO's revenue growth has slightly outpaced the industry average of 6.7%. Since the same quarter one year prior, revenues rose by 14.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Although YHOO's debt-to-equity ratio of 0.04 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 4.84, which clearly demonstrates the ability to cover short-term cash needs.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Internet Software & Services industry and the overall market, YAHOO INC's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for YAHOO INC is currently very high, coming in at 70.85%. 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, YHOO's net profit margin of -1.73% significantly underperformed when compared to the industry average.
  • You can view the full analysis from the report here: YHOO Ratings Report