Yahoo! Inc. (YHOO) Stake in Alibaba Continues to Concern Investors

Yahoo! Inc. (NASDAQ:YHOO) Sunnyvale CA

Yahoo! Inc. showed off its earnings numbers for the three months ending September 2015 on Tuesday, October 20 the bell rang for the day on in New York. The firm’s earnings came in at $0.17 per share for the quarter while revenue came in at $1.23B.

In the same period of last year, Yahoo! Inc. managed to earn $6.72 per share. Sales for the same quarter in 2014 came in at $1.15B. In the three months heading into the release of today’s results, Yahoo! Inc. stock has 3Month lost 17.00% of their value.

On top of the firm’s poor earnings, and apparent poor outlook, investors are getting more bearish on its stake in Alibaba Group Holding. That holding makes up the majority of Yahoo’s market cap, and it’s been falling in value in line with shares in the Chinese e-commerce site, and rumors that Yahoo owners will have to pay a major tax bill on their holdings should it be spun off.

Yahoo Inc (NASDAQ:YHOO) Sunnyvale CA

Here’s what Wall Street expected from Yahoo! Inc.

Heading into the publication of these numbers, Wall Street forecast that Yahoo! Inc. had earned $0.17 per share by consensus. Revenue was thought to have hit $1.26 per share for the quarter.

43 analysts were following Yahoo! Inc. in the months before the firm put out these numbers. 10 analysts told clients the firms were a Buy, 17 analysts said they thought investors should make the stock Overweight, 16 analysts reported that the best strategy was to Hold the shares. None of the analysts advised that their readers hold the firm Underweight and none of the analyst thought the best move was to Sell the stock ahead of earnings.

Yahoo! Inc. earnings in context

Yahoo! Inc.  is a technology company. The firm works in providing Internet search, communication and digital content. The Company manages its business geographically: the Americas; Europe, the Middle East and Africa (EMEA), and Asia Pacific. Yahoo’s products include Search, Communications, Digital content, Flickr, and Tumblr. Yahoo Search is a search engine serves as a starting point to navigate the Internet and discover information, which is ranked and organized -based on their relevance to the query.

For the twelve months in 2015 Wall Street thinks that Yahoo! Inc. will manage a profit $0.67 per share. The full sales number for the fiscal year is expected to amount to $5.06B. In its prior fiscal year Yahoo! Inc. made $1.57 per share. Total revenue for the firm’s last fiscal year came in at $4.40B.

Shares in the firm were feeling the pain after the earnings reveal. At time of writing, before the market opened up for the day on Wall Street, Yahoo was down 1.64 percent in pre-market trading.

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Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.


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