Will Yahoo Beat Expectations From Hedge Fund Analysts?
Yahoo (NASDAQ:YHOO) is set to release its Q3 earnings on October 15, 2013. Last quarter, YHOO reported a 15.38 percent positive surprise in regard to Wall Street estimates. But was the $.31 per share Wall Street estimate what the market really expected? Revenue has declined since Q4 of 2012, and has been relatively unchanged for the past two quarters. Despite stagnant revenue growth, the stock hit a new 5-year high in late September.
Last quarter Yahoo posted GAAP revenues of 1.14 Billion. This was down both sequentially and year over year. Expense Management widened margins from the previous years second quarter.
With Marissa Mayer at the helm, Yahoo has continued to grow its share price in spite of revenue remaining relatively unchanged. This leaves investors wondering if Mayer is brilliant, lucky, or overrated. Yahoo’s 25 percent stake in Alibaba was the product of previous CEO Jerry Yang, and has been contributed for the major growth of the stock price. Alibaba has been recently rumored for an upcoming IPO, and share price is being adjusted accordingly. So if revenue is not growing, why is the share price continuing to rise? If Yahoo could beat expectations this quarter, would this be a double positive for the company? We think so, and using the Estimize Expectation would be a much more conservative mark to be beaten.
Estimize EPS estimates come in slightly above the Wall Street consensus at $.36 per share versus $.33 per share. Revenues also reflect the buy side expectation at $1,089 versus the Wall Street expectation of $1,080.