FACEBOOK

Yahoo Reports Dismal Second-Quarter Revenue

by

Yahoo (YHOO) reported mixed second-quarter results Tuesday. Revenue, excluding traffic acquisition costs, fell 5%, while GAAP revenue dropped 23%, as softness in display revenue and turnover at the sales level impacted results toward the second half of the quarter. The attractiveness of competing sites like Facebook and Google (GOOG) is becoming increasingly more difficult for Yahoo to overcome, in our opinion. Income from operations, however, still advanced 9%, while net earnings per share jumped 18% from the prior-year period. Cash flow from operations fell 5% from the same period a year ago, while free cash flow shrunk 25% to $96 million during the quarter. We don’t expect a material about-face in Yahoo’s core U.S. operations, with the likes of Facebook and … Read more

Initiating Coverage of LinkedIn at $45 Fair Value

by

This article originally appeared on Seeking Alpha. Please view disclosures: https://seekingalpha.com/article/271173-initiating-coverage-of-linkedin-at-45-fair-value Although LinkedIn (LNKD) appears to have carved out a nice niche in the professional-networking arena, the firm has quite a bit of work to do to effectively maximize its revenue platform, and competition from a plethora of potential rivals (including Facebook and Google) may inevitably cause long-term head winds. Still, the firm’s revenue trajectory will be stellar during the next few years, and translating this growth to the bottom line will largely hinge on its ability to leverage infrastructure and marketing costs. I am initiating coverage of LinkedIn with a $45 per share fair value estimate; revenue estimates at $496 million in 2011, $831 million in 2012, and $1.2 billion … Read more

5 Reasons to Buy Ancestry.com

by

This article originally appeared on Seeking Alpha. Please view disclosures: https://seekingalpha.com/article/270120-5-reasons-to-buy-ancestry-com It’s not every day that investors come across a firm with a cash-rich, subscription-based business model with substantial revenue growth prospects and operating-leverage tailwinds. And certainly one wouldn’t expect to find it with a name such as Ancestry.com. But whether you’re a family history buff or not, this name may be a perfect fit for the aggressive growth portion of your equity portfolio. Here are five reasons to buy this name at these levels: 1) Ancestry.com’s long-term market opportunity is phenomenal. 2) The firm’s incremental margins on new subscribers are more than triple that of current reported results, offering a long runway for earnings leverage. 3) Ancestry.com’s cash-rich, subscription-based business … Read more