NEW YORK (TheStreet) -- Yahoo! (YHOO) rose Monday after Chinese e-commerce giant Alibaba confirmed plans to go public on the New York Stock Exchange. Yahoo! owns a 24% stake in Alibaba.
Alibaba's initial public offering could raise as much as $15 billion in what would be the biggest initial public offering since Facebook (FB). Alibaba has enjoyed immense success in the Chinese market. The IPO could valued the company at about $100 billion.
Yahoo! shares rose 2.8% to $38.65.
TheStreet Ratings team rates YAHOO INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about its recommendation:
"We rate YAHOO INC (YHOO) a BUY. This is driven by a number of strengths, 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 solid stock price performance, increase in net income, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 43.47% and other important driving factors, this stock has surged by 66.65% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, YHOO should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Internet Software & Services industry average. The net income increased by 27.9% when compared to the same quarter one year prior, rising from $272.27 million to $348.19 million.
- Although YHOO's debt-to-equity ratio of 0.08 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 3.30, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for YAHOO INC is currently very high, coming in at 83.75%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.50% is above that of the industry average.
- You can view the full analysis from the report here: YHOO Ratings Report