Cantor analyst Youssef Squali weighed in today with his views on Yahoo! Inc. (NASDAQ:YHOO), as the company will announce its second quarter 2015 earnings results on Tuesday, July 21 after market close. Wall Street expects Yahoo to post earnings of $0.18 a share and $1.03 billion in revenue, falling from $0.37 earnings per share and $1.04 billion in revenue from the same quarter a year prior. However, according to Squali, Yahoo should continue to move in tandem with Alibaba Group Holding Ltd (NYSE:BABA), and be impacted by any updates on the proposed tax-free spin-off of that asset, expected in fourth-quarter.

Squali wrote, “Yahoo!’s 2Q:15 results are likely to be benign, in line with muted expectations, but particular focus should be put on Display growth, which has remained stubbornly negative since 2Q:14, and on MVNS, one of the few bright spots in the Yahoo! story today. Management has stated repeatedly that Yahoo! will show positive growth in 2015, and we’re awaiting more clarity on that on this call.”

The analyst continued, “For the stock to work post Alibaba stake spin-off, management needs to grow core Yahoo! again, with a clear path that gets it closer to industry rates, something easier said than done, in our view. Growth in native, mobile, video, and social are key drivers for display, and the renewed search deal with Microsoft, announced last quarter (and early tests with Google), should help 2H:15/2016 search growth.”

The analyst rates Yahoo! stock a Buy with a price target of $60, which implies an upside of 50.5% from current levels.

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Youssef Squali has a total average return of 24.5% and a 71.0% success rate. Squali has a 6.4% average return when recommending YHOO, and is ranked #9 out of 3712 analysts.

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