After today’s close we’ll get to see quarterly and fiscal year-end results from Yahoo! (NASDAQ: YHOO). Over the last week the consensus estimates for 2008 have come in marginally, although the real changes would seemingly come after todays report. Here are the First Call earnings and revenue targets for this quarter and beyond, with revenues on an ex-Traffic Acquisition Cost (ex-TAC) basis:
- Q4-07 $0.11 EPS & $1.41 Billion Revenues;
- Q1-08 $0.11 EPS & $1.37 Billion Revenues;
- FY-08 $0.52 EPS & $5.90 Billion Revenues.
The stock has traded in a 52-week trading range of $18.72 to $34.08, and shares are down less than 0.5% at $20.70 in late morning trading. Analysts still have a price target of roughly $32.00, more than a 50% premium to today’s share prices. We caution against using options for a true prediction tool with volatility so high right now, but options traders appear to be braced for a move of nearly $1.50 per share in either direction today. Unfortunately its chart isn’t pretty. It has been using $20-ish and slightly under as a support level of late, although this is at risk of falling through to lows not seen since late-2003.
We really think that there is a chance that Yahoo! will cease to be its own entity in the near future, be it a takeover, a massive reorganization, or even a "merger of equals." Interestingly enough, we’d only expect a potential merger to come if this gets hit after earnings or after another event.
Last week we outlined an "earnings trifecta" where we compared and contrasted the earnings of Yahoo! (YHOO) for today, Amazon.com (NASDAQ: AMZN) for Wednesday, and Google (NASDAQ: GOOG) on Thursday. That full report is here.
Interestingly enough, Wall Street and main Street have gotten so negative on the situation at Yahoo! that you could likely see a serious recovery on anything full of "not so bad news" in the release today. We also believe that a lot will be riding on how Jerry Yang carries the meeting today.
Jon C. Ogg
January 29, 2008
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