Yahoo! Earnings Preview

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Investors are on the edge of their collective seats, hoping that Yahoo! (NAS: YHOO) will top analyst expectations for the fifth consecutive quarter. The company will unveil its latest earnings on Tuesday. Yahoo! is a digital media company that delivers personalized digital content and experiences across devices worldwide.

What analysts say:
 

  • Buy, sell, or hold?: Analysts think investors should stand pat on Yahoo! with 14 of 25 analysts rating it hold. Analysts don't like Yahoo! as much as competitor Sohu.com overall. Eight out of 14 analysts rate Sohu.com a buy compared to 11 of 25 for Yahoo!. While analysts still rate the stock a hold, they are a little more optimistic about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $1.07 billion in revenue this quarter. That would represent a decline of 4.5% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.17 per share. Estimates range from $0.15 to $0.19.

What our community says:
CAPS All-Stars are solidly backing the stock with 79.6% granting it an outperform rating. The community at large concurs with the All-Stars with 79.9% assigning it a rating of outperform. Fools are gung-ho about Yahoo! and haven't been shy with their opinions lately, logging 2,574 posts in the past 30 days. Yahoo!'s bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
Yahoo!'s profit has risen year over year by an average of 50% over the past five quarters. Revenue has fallen for the past three quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

69.8%

68.9%

63.4%

57.5%

Operating Margin

15.5%

15.6%

14.4%

11.8%

Net Margin

19.3%

18.4%

20.5%

24.7%

For all our Yahoo!-specific analysis, including earnings and beyond, add Yahoo! to My Watchlist.

The Motley Fool owns shares of Yahoo!. Motley Fool newsletter services have recommended buying shares of Yahoo!.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

At the time this article was published

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