Ahead of the Bell: Yahoo gains on 4th-qtr results
NEW YORK (AP) — Yahoo Inc. shares to climb before Tuesday's opening bell after the Internet company released better-than-expected fourth-quarter results, helped by higher ad prices and more money coming in from overseas investments.
The results announced after the markets closed Monday covered Yahoo's first full quarter under CEO Marissa Mayer. Yahoo lured Mayer away from Google Inc. in mid-July in its latest attempt to snap out of a funk that had depressed its revenue and stock price.
Yahoo shares are up more than 30 percent since Mayer joined the Sunnyvale, Calif., company. The shares continued to climb in Monday's aftermarket session following the release of the quarterly results.
Although Yahoo still isn't keeping pace with the overall growth of the Internet ad market, the company fared well enough during the fourth quarter to produce its first full-year gain in revenue since 2008, though the increase was tiny.
Cantor Fitzgerald analyst Youssef Squali backed his "Hold" rating and $21 price target for Yahoo, saying that while the quarterly results were roughly in line with expectations, lower contributions from display advertising and a lower-than-expected guidance keep him from getting too enthusiastic about the stock.
Squali said more clarity about the upcoming public offering of Chinese Internet company Alibaba Group, a portion of which Yahoo still owns, or a turnaround in its core advertising operations, would be needed to make him more positive.
Jefferies analyst Brian Pitz also kept a "Hold" rating on Yahoo stock, but boosted his price target by $2 to $20.
"Yahoo is relatively cheap on a sum-of-parts basis, but this only loosely factors in required reinvestment to grow the business, and timing for the sale of the remaining Asian assets," Pitz wrote in a note to investors.
Yahoo shares rose 60 cents, or 3 percent, to $20.91 in premarket trading.