Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Altaba Inc. (formerly Yahoo) -- Ignore unavailable to you. Want to Upgrade?

To: memflyken2 who wrote (20875)	4/6/1999 8:49:00 PM
From: Glenn D. Rudolph	Read Replies (2) \| Respond to of 27307

Yahoo! – 6 April 1999 2 n Quarterly Preview Yahoo! will report Q1 results after the close on Wednesday, April 7. We believe the company will have another strong quarter. As usual, we recommend that investors focus on four metrics: 1) revenue; 2) EPS, 3) pageviews, and 4) operating margin. Our estimates, which are in line with consensus, call for: * $76 million in revenue, up 149% year-over-year and flat sequentially (Q1 is a seasonally weak quarter for advertising revenue); * $0.08 of EPS versus $0.02 last quarter; * 205 million average daily pageviews, up 23% sequentially; and * an operating margin of 31%, nearly 5 points lower than last quarter. Yahoo! has always beaten consensus, and we would not be surprised to see it do so again. Given the company's strong track record, we also believe it is also fair to say that it must beat consensus. Based on our modeling, we believe it is conceivable that Yahoo! might report Q1 revenue of as much as $85 million, possible EPS of $0.9 - $0.10, an operating margin of 35% or so, and pageviews of 210 million. This would, as usual, represent outstanding performance— especially given a seasonally weak quarter for advertising revenue. As usual, the promulgation of “whisper” numbers has devolved into a game of “mine's bigger than yours,” and the highest EPS “whisper” we have heard is a hallucinatory $0.11-$0.12, which we view as unachievable. We would note that to reach this level Yahoo! would have to dust our top line by $15 million (Q1 revenue of $90 million would represent an increase in the year-over-year growth rate—a rabid assumption for a company growing approximately 200% year-over-year) and hike its operating margin nearly 40%. Yahoo!'s stock usually trades off after the company's earnings release, and we would not be surprised to see this pattern repeated again this quarter. Because of the Geocities acquisition, however, the “insider window” that usually opens two days after the earnings call will not open at all this quarter, so the sell-off might be less pronounced than usual. If the company comfortably exceeds consensus and we are able to raise our 1999 and 2000 estimates, we expect to maintain our rating. We are looking forward to gathering more detail on the call about the Geocities and Broadcast.com acquisitions, which are expected to close in Q2 and Q3, respectively.