“With capital allocation actions serving as a catalyst to drive a revaluation in the stock, we believe the value of Yahoo’s balance sheet assets and the core business are worth more than the current stock price,” he writes in research note. “In our opinion, this revaluation, along with recent clarity on the turnaround and channel checks signaling effective management of the organization’s structure, investments and finances, creates a very attractive risk/reward scenario, particularly given the early reaction in the stock to the buyback and the roughly 75% of the buyback that still remains. ”
Roughly 75% of the buyback that still remains
Goldman Sachs analyst Heath Terry believes Yahoo's stock will climb even higher as more investor enthusiasm builds for Mayer's turnaround strategy and the value of the company's remaining holdings in Asian Internet companies becomes clearer. Besides retaining a 24 percent stake in Alibaba, Yahoo also owns 35 percent of Yahoo Japan. He also thinks Yahoo's stock will get a boost from future buybacks planned by Yahoo.