Yahoo! Inc. (NASDAQ:YHOO) shares have tumbled nearly 3% today after the internet giant disclosed yesterday that it fell victim to a “massive data breach,” with a copy of user account information stolen from the network in late 2014 by what YHOO has reason to believe is a “state-sponsored” actor.

The account information stolen held names email addresses, telephone numbers, dates of birth, hashed passwords, which Post notes a “vast majority” with bcrypt, and there are even instances where encrypted or unencrypted security questions and answers were swiped. Yet, thankfully for users as well as Yahoo’s financial liability, unprotected passwords, payment card data, and bank account information were protected and not plundered during the breach.

Merrill Lynch top analyst Justin Post acknowledges this is a “tough event,” but notes, “we still see upside.” As such, the analyst reiterates a Buy rating on shares of YHOO with a $55 price target, which represents a nearly 28% increase from where the stock is currently trading.

Post asserts, “While clearly a negative for the company that could result in email account closures, we note three important items in relation to Yahoo’s business impact and financial liability: 1) Yahoo believes this was a state-sponsored breach; 2) the breach did not include unencrypted passwords; and 3) the breach did not include financial information.”

While it remains uncertain, Post maintains his confidence that the Verizon deal will ultimately go through, explaining, “For Verizon to back out of the deal, we think they would need to assume Yahoo acted in bad faith during negotiations and that the Yahoo asset is impaired or comes with significant liability (such as a potential class action suit).”

“We do not anticipate a major impact on Yahoo’s business related to this breach given outcomes at eBay and LinkedIn,” the analyst concludes.

As usual, we like to include analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, top five-star analyst Justin Post has achieved a high ranking of #13 out of 4,189 analysts. Post upholds a 77% success rate and realizes 20.2% in his annual returns. When recommending YHOO, Post earns 11% in average profits on the stock.

TipRanks analytics indicate YHOO as a Buy. Based on 26 analysts polled in the last 3 months, 50% rate a Buy on YHOO, while 50% maintain a Hold. The 12-month price target stands at $42.60, marking a nearly 1% downside from where the shares last closed.