This company has changed CEOs five times in the past five years. Its shares have tumbled from $28 a share in 2008 to $9.39, and since then have never seen the $20 mark. But with the appointment of a new CEO, Marissa Mayer, things seem to be falling into place. Since her appointment, the numbers have improved, the website looks lively, and the stock trades near its 52-week high.
Yes, I am talking about Yahoo! Inc. (NASDAQ:YHOO) the company that was lacking innovation in the last few years, but seems to be strengthening again.
Let us take a look at how things might shape up in the future and whether Yahoo! is the right stock to buy at this moment.
A first in the past four years, the company reported growth in revenue in its recent quarter. Revenue improved 2% to $1.35 billion, compared to 1.32 billion in the same quarter last year and more than 10% compared to the third-quarter of 2012. The non-GAAP EPS for the last quarter was reported at $0.32, 28% higher than the prior-year period.
To start with, the company has a strong cash balance of $8.41 billion and a very low debt burden of $126 million, which can help it finance its future projects with ease. Yahoo! has two very popular products, Yahoo! Mail and Yahoo! News which it can capitalize on. Yahoo! Finance is still the most user-friendly sight for investors, deriving a lot of volume on the website.
Yahoo! has been late in moving into the mobile segment, unlike its competitors who have their own browsers, operating systems, hardware, and tablets, but the company seems to be improving in the mobile apps world. The company, in order to become more alluring for its mobile users, redesigned its email service last December.
As per Yahoo!’s deal with CBS Television Distribution, The Insider will be renamed omg! Insider and will promote a multiplatform entertainment series. Yahoo’s already popular omg! Network, with 30 million viewers each month, should draw more traffic as it would be the only place where fans of The Insider can find the updated videos of the show.
Moreover, Yahoo!’s partnership with NBC Sports will increase the former’s sports coverage on television and the latter’s online reach. The companies, without spending in a joint venture, have agreed to cross-promote each other and derive mutual benefits of each other’s audiences. Apart from increasing traffic, both these deals should improve Yahoo!’s top and bottom lines.