RBC Capital Sets Expectations on Yahoo! Inc. Ahead of 1Q:15 Results

RBC Capital analyst Mark Mahaney came out with his prediction on Yahoo! Inc. (NASDAQ:YHOO), as the company is scheduled to report its first-quarter results on Tuesday, April 21 after market close. Additionally, the analyst maintained a Perform rating on the stock, with a $55 price target, which implies an upside of 24% from current levels.

Mahaney noted, “For Q1:15, we are expecting Net Revenue (ex-TAC) of $1.04B, slightly below Consensus of $1.06B. We are estimating EBITDA of $238MM and Non GAAP EPS of $0.16 vs. the Street at $236MM/$0.18. Note that our revenue and EBITDA estimates are within the company’s Q1 guidance range and imply a 4% Y/Y decline in Net Revenue and a 22% Y/Y decline in EBITDA.”

“The tax-free spin-off of the Alibaba stock is unambiguous goodness. And the $380MM in Mobile, Video, Native & Social Ad Revenue in Q4 is a distinct positive. But fundamentally – with 1%-2% Total Revenue Y/Y declines in Q4 and more of the same expected in Q1 – YHOO remains a show-me story.”, the analyst added.

Bottom line: “We view Street estimates as reasonable for Q1, with a modest likelihood of upside variance on the bottom-line. We believe YHOO should be able to at least bracket Street estimates for Q2.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Mark Mahaney has a total average return of 23.3% and a 65.9% success rate. Mahaney has a 2.7% average return when recommending YHOO, and is ranked #16 out of 3573 analysts.

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