We are less than two weeks from the one-year anniversary of my blog post entitled “Does Marissa Mayer Make Yahoo Stock AÂ WorthwhileÂ Bet?”Â thatÂ highlightedÂ how cheap theÂ sharesÂ were at $16 eachÂ and the answer has been a resounding “yes.” Yahoo (YHOO) has now doubled in price and I think the easy money has been made. Take a look at my sum-of-the-parts valuation on the company:
As you can see, the majority of the value in Yahoo is their 20% stake in Alibaba (slated to go public soon at a valuation of around $100 billion) and the company’s core operations that Marissa Mayer is in the process of trying to turn around. The stock right now is trading right at this $32-$33 valuation. While there is additional upside if Alibaba marches even higher post-IPO and/or if Yahoo can start to grow its core business, both of those are far from assured. As a result, the stock looks fully priced based on what we know today.
Full Disclosure: Long Yahoo at the time of writing but positions may change at any time