NEW YORK (TheStreet) -- Shares of Yahoo! Inc (YHOO) are climbing, up 1.22% to $49.65 in early market trading Wednesday, after the global technology company had its price target raised to $55 from $48 at Bank of America following its $640 million acquisition of digital video advertising platform BrightRoll, in an effort to boost revenue.
Analysts at Bank of America cited the acquisition for its increase in price target, but maintained its "neutral" rating on shares.
Yahoo! shareholders urge AOL merger; watch the video below for details:
Yahoo! said BrightRoll's ad revenue could exceed $100 million this year.
The acquisition marks Yahoo!'s first major purchase since gaining $9.4 billion in September by selling part of its stake in Chinese e-commerce company Alibaba Group Holding (BABA) .
Also, it was reported that Yahoo shareholders are making a direct plea to AOL CEO Tim Armstrong to explore a merger with Yahoo due to un happiness with CEO Marissa Mayer's turnaround efforts, Reuters reports.
Separately, TheStreet Ratings team rates YAHOO INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate YAHOO INC (YHOO) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 2183.5% when compared to the same quarter one year prior, rising from $296.66 million to $6,774.10 million.
- YHOO's revenue growth trails the industry average of 27.5%. Since the same quarter one year prior, revenues slightly increased by 0.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- YHOO's debt-to-equity ratio is very low at 0.03 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.75, 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.
- You can view the full analysis from the report here: YHOO Ratings Report