NEW YORK (TheStreet) -- Shares of Yahoo! Inc  (YHOO) are up 1.48% to $39.86 in midday trading Tuesday after it was reported that the company is in talks to acquire BrightRoll, a cross-platform digital video advertising service, TechCrunch reports.

Term sheets between Yahoo! and BrightRoll have been signed with the price of the deal anywhere between $500 million to $1 billion, but most likely to be in the range of $700 million to $725 million, TechCrunch added.

Yahoo! has been building up its video and video advertising content under pressure from activist investor Starboard Value LP.

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BrightRoll's platform works across web, mobile and connected TV devices, and acts as an intermediary and service for both advertisers and publishers, noted TechCrunch.

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 largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these 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:

  • Although YHOO's debt-to-equity ratio of 0.09 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 2.99, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has slightly increased to $357.41 million or 8.03% when compared to the same quarter last year. Despite an increase in cash flow, YAHOO INC's cash flow growth rate is still lower than the industry average growth rate of 25.66%.
  • The gross profit margin for YAHOO INC is currently very high, coming in at 83.10%. 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 24.87% compares favorably to the industry average.
  • YAHOO INC's earnings per share declined by 13.3% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, YAHOO INC reported lower earnings of $1.26 versus $3.28 in the prior year. This year, the market expects an improvement in earnings ($1.38 versus $1.26).
  • The revenue fell significantly faster than the industry average of 28.1%. Since the same quarter one year prior, revenues slightly dropped by 4.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • You can view the full analysis from the report here: YHOO Ratings Report

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