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Yahoo ( YHOO ) outlined a new turnaround strategy late Tuesday along with a Q4 revenue beat, but the beleaguered Web portal’s new plan “sounds a lot like the old plans,” according to Pacific Crest Securities analyst Evan Wilson, who lowered his 2016 revenue and earnings estimates for the company. “Yahoo beat Q4 estimates but is still struggling for organic growth,” wrote Wilson in an industry note. He said that Yahoo’s new plan “looks more dire than the previous plan.” Yahoo CEO Marissa Mayer said that the plan includes a new round of job cuts and a possible reverse spinoff of the core business. And, she said, “The board will also engage with other qualified strategic proposals.” Analysts say that Yahoo’s latest plan essentially puts the company on the sales block. “After 10 reported layoffs, countless plans and CEO after CEO, it is hard to blame management or the strategy,” wrote Wilson. “The core search and display assets are limited by scale and data, and we do not see a way out of it save for linking with a platform that is not so limited.” Yahoo stock closed down 4.8% at 27.68 on the stock market today . Earlier in the day, Yahoo slid to 26.57, its lowest point since September 2013. Yahoo stock is down 38% over the past 12 months. Yahoo stock got at least six price-target cuts from investment banks Wednesday. Rosenblatt Securities analyst Martin Pyykkonen downgraded it to sell from neutral, saying that he couldn’t find “a growth pulse” on Yahoo stock, as advertising dollars increasingly slip away to rivals. “ Facebook ( FB ), Alphabet ( GOOGL ), Netflix ( NFLX ), etc. are obvious, but there are also a vast number of smaller properties taking usage and traffic away from Yahoo and its properties,” Pyykkonen said. Nomura analyst Anthony DiClemente said that while Yahoo’s core business was “modestly higher” in Q4, the company’s guidance for Q1 and 2016 missed his expectations. “We were discouraged by Q1 guidance, which suggests 13% margins; guidance for Q1 implies net revenue and EBITDA (earnings before interest, taxes, depreciation and amortization) declines of 19% and 53% year over year, respectively,” said DiClemente. Nomura lowered its target price on Yahoo stock to 34 from 40, adjusting for recent changes in the valuation of Yahoo’s holdings in China e-commerce giant Alibaba Group ( BABA ). Yahoo owns a 15% stake in Alibaba, about 385 million shares. After an initial plan to spin off its Alibaba shares, Yahoo reversed course following tax concerns. On Tuesday, Yahoo indicated that a reverse spinoff of its stake in Alibaba still remains a possibility. But Yahoo will close its offices in Dubai, Mexico City, Buenos Aires, Madrid and Milan. Alibaba stock was down 3%, near 63, in midday trading Wednesday, and its shares are down more than 30% in the past 12 months. Along with its Q4 earnings, Yahoo announced that it will cut 15% of its workforce — roughly 1,600 jobs — and look to sell non-core divisions and assets, such as patents and real estate, as part of a strategic plan to return the company to what it forecasts as modest though accelerating growth in 2017 and 2018. The company’s turnaround plan includes continued investment in what the company calls “Mavens,” Mayer said. Mavens refers to Yahoo’s mobile, video, native and social businesses, where its ad revenue is growing. Mayer said that Yahoo’s consumer products division will consist of three global platforms — Search, Mail and Tumblr — and that it will focus on four vertical markets: news, sports, finance and lifestyle. Yahoo said that Q4 earnings excluding items plunged 57% from the year-earlier quarter to 13 cents a share, meeting the views of FactSet and analysts polled by Thomson Reuters. Yahoo said that revenue minus traffic acquisition costs — what the company pays other sites to carry its ads — fell 15% to $1.002 billion. Still, it that beat FactSet’s $948.2 million forecast. Yahoo added that its total revenue in Q4 rose 1.6% to $1.27 billion, where Thomson Reuters had expected $1.19 billion. For Q1, Yahoo is guiding GAAP revenue at $1.005 billion to $1.09 billion, down 17.9% to down 11%. Scalper1 News
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