Yahoo may regret not paying up for Facebook last year, a report by analysts at Needham argues.
The report, co-written by analyst Mark May, who covers consumer Internet, references Facebook’s most recent traffic numbers (about 1.5 billion pages/day, first reported here at VentureBeat) and says social networking could one of the most important growth areas of the Internet over the next five years.
By referencing Facebook’s doubling in growth, the reports also implies Facebook may be worth twice what it was last year, suggesting the business may have a $3 billion value to a buyer based on last year’s supposed $1.6B Yahoo “offer.” Download the report here.
Of course, this assumes that Facebook’s Mark Zuckerberg was prepared to sell in the first place.
But why does Needham keep Yahoo at a “buy” recommendation, when the 12-month target price of $30 is lower than the current price of $31.72?
6 Comments
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Ricky said:
His last name is Zuckerberg.
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Matt Marshall said:
yeesh. fixed.
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Roman said:
Just because his title says he’s an analyst does not mean he is one. The internet reality of social websites is ruled by horde mentality. Hordes, inherently, are unpredictable. So to state with any degree of certainty that Yahoo may have made a mistake is somewhat un-analytical. I agree with many who think that Mark should have sold Facebook while the goods are hot. It is likely that the founders of Facebook’s competition are graduating high-school this year, so watch out Facebook! For lessons learned (or not) see friendster.com , sixdegrees.com and soon to be my(empty)space.com
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tomo said:
Amen Roman!! What exactly are this guys qualifications to be an analyst? Answer, none. This analyst job isn’t a regulated position and this guy along with many others are portrayed as experts in their respective markets when many of them took those jobs right out of college and are analyzing markets which there is no historical track record. In other words, if you place any faith in what they say you’re being shamboozled. Lets see, banks make money through fees. they get fees for transactions and management. transactions imply buying, selling or trading of currency or other assets. a management fee entails the bank taking a % of money in their control(not the money they made but money in their control - big difference). ipo’s are transactions, secondaries are transactions, M and A’s are transactions too. Banks do all of the above and the big ones do it over and over and over again. It would be interesting to see which is higher, the value banks suck out of a dollar(through fees) as it is in circulation or the value the govt sucks out of a dollar(through taxes) as it is in circulation. My guess is about equal sucking.
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Jimmy said:
“But why does Needham keep Yahoo at a “buy†recommendation, when the 12-month target price of $30 is lower than the current price of $31.72?”
…. because most analysts are just as clueless as you and I … I used to be a mutual fund portfolio manager and it has been my experience that analysts’ price targets are way off half of the time.
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internet said:
1) why a buy rating but $30 price target? the analyst clearly states in his report that his earnings estimates are likely to increase from recent strength in yahoo’s new search ad platform. if he thinks his estimates are too low, he also probably thinks is price target is too low — and likely to increase after the earnings report in a week or two. 2) you say he has no qualifications, but i’ve know mark (the analyst) for several yrs and he knows the internet sector and how to pick stocks as well as any on wall st. he’s been covering internet on wall street for six or seven yrs. you guys are a bunch of cynics.
