Yahoo finally seems to be breaking out
of the many years of despair for its investors and well wishers under
a new CEO. In this post, we look at the fundamentals of the firm
based on metrics I had posted on earlier.
The Metrics
| Metric | Yahoo Stock | Buy/ Hold/ Sell |
|---|---|---|
Price to Earnings
|
7.10
|
Buy
|
Price to Book
|
1.75
|
Hold
|
Profit Margin
|
79.12%
|
Strong Buy
|
Dividend Yield
|
0%
|
Hold/ Sell
|
Payout ratio
|
N/A
|
N/A
|
Free Cash Flow
|
-787M
|
Sell (See below)
|
Graham Index
|
45.14
|
Strong Buy
|
Total Current Assets
|
5.6B
|
Demystifying the poor FCF
So it seems that the stock has a poor
Free Cash Flow that needs to be corrected. The firm does have enough
money to sustain the negative FCF. The main influence on the FCF
seems to be Adjusted Net Income which was done in September 2012.
Period
Ending
|
Dec
30, 2012
|
Sep
29, 2012
|
Jun
29, 2012
|
Mar
30, 2012
|
Net
Income
|
$0.00
|
$0.00
|
$0.00
|
$0.00
|
Operating
Activities, Cash Flows Provided By or Used In
|
||||
Depreciation
|
$0.00
|
$0.00
|
$0.00
|
$0.00
|
Adjustments
To Net Income
|
$0.00
|
-$5,601,529.00
|
-$59,191.00
|
-$132,335.00
|
Based on the above, it seems that the
firm will start showing positive FCF soon, which will reveal a more
optimistic picture for the firm.
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