Why Is Yandex (YNDX) Up 0.3% Since Last Earnings Report?
A month has gone by since the last earnings report for Yandex (YNDX). Shares have added about 0.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Yandex due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Yandex's Q1 Earnings Miss Estimates
Yandex reported first-quarter 2021 adjusted earnings of 8 cents per share, missing the Zacks Consensus Estimate by 75.7%.
Further, the figure declined 65.2% sequentially and 57.9% year over year.
Revenues were $966.1 million. In ruble terms, the figure stands at RUB 73.1 billion, which rose 56% on a year-over-year basis and 2.1% from the previous quarter.
The reported revenue figure includes the consolidated financial results of Yandex.Market.
Improving momentum across the company’s online advertising drove top-line growth. Further, strong growth across Search, Classifieds, Taxi and Media Services segments contributed well.
However, the pandemic-induced supply-chain disruptions were concerning.
Notably, the company made some alterations in its segments in the reported quarter. It has changed the name of the Other Bets and Experiments segment to Other Business Units and Initiatives. Further, the IoT business got renamed as Devices.
Furthermore, Devices was shifted to the Other Business Units and Initiatives segment from Search & Portal. Also, Yandex moved Geo from the Other Business Units and Initiatives segment to Search & Portal.
Top-Line Details
Total online advertising revenues were RUB 35.9 billion (49% of total revenues), reflecting growth of 20% on a year-over-year basis, driven by well-performing Search and Zen.
Taxi revenues, excluding sales of goods, were RUB 20.7 billion (28% of total revenues),up 57% on a year-over-year basis, driven by strength in the Yandex.Eats, ride-hailing and logistics businesses.
Other revenues of RUB 5.5 billion (8% of total revenues) surged 125% from the prior-year quarter. This was primarily driven by well-performing Media Services, expanding cloud business and Yandex.Market.
Revenues from sales of goods were $10.9 billion (15% of revenues), which jumped from $1.2 billion in the year-ago quarter.
Segments in Detail
Search and Portal: The segment generated RUB 35.1 billion revenues (48.1% of total revenues), up 15% year over year. The company’s strong position in the Russian search market remains a key catalyst. Notably, its market share was 60% in the reported quarter, up 190 basis points (bps) year over year. This can be attributed to expanding Yandex’s mobile search share.
Notably, mobile revenues accounted for 54.8% of the company's search revenues. Further, mobile search traffic accounted for 62.4% of total search traffic. This was driven by Yandex’s search share on Android, which was 59.3%, expanding 380 bps from the year-ago quarter.
Taxi: The segment generated RUB 26.6 billion revenues (36.3% of revenues), rising 89% from the year-ago quarter. The impressive year-over-year rise was driven by positive contributions from Yandex.Lavka and Yandex.Eats, which benefited its FoodTech services in the quarter under review. Further, improvement in the ride-hailing business remained a major positive. The number of rides increased 24% from the prior-year quarter.
Classifieds: The segment generated revenues of RUB 1.8 billion (2.4% of revenues), reflecting year-over-year growth of 20%. This was attributed to growth of auto vehicle reports.
Media Services: The segment generated revenues of RUB 3.5 billion (4.8% of revenues), soaring 143% from the year-ago quarter. This can primarily be attributed to solid momentum across Yandex.Plus subscription.
Other Business Units and Initiatives: The segment accounted for revenues of RUB 4.7billion (6.5% of total revenues), up 171% from the prior-year quarter. This was driven by the robust performance of Yandex’s Zen and Devices businesses. Further, the growing cloud business contributed well.
E-Commerce:The segment accounted for revenues of RUB 7.3 billion (10% of total revenues) in the reported quarter. Strong marketplace business, owing to growing momentum across third-party sellers, remained noteworthy.
Operating Details
In first-quarter 2021, adjusted net income margin was 3%, contracting 800 bps from the year-ago quarter.
Operating expenses were RUB 74.2 billion, which was up from RUB 41.7 billion in the prior-year quarter.
The company incurred a loss of RUB 1.1 billion from operations compared with RUB 5.3 billion of operating income.
The company’s total traffic acquisition costs amounted to RUB 5.4 billion, up 1% on a year-over-year basis. As a percentage of revenues, the figure contracted 400 bps year over year to 7.4% in the reported quarter.
Balance Sheet & Cash Flows
As of Mar 31, 2021, cash and cash equivalents were $1.2 billion, down from $1.8 billion as of Dec 31, 2020.
Accounts receivables totaled $359.7million, increasing from $344.4 million in the previous quarter.
In thefirst quarter, cash generated from operations was $113.1 million, up from $83.1 million compared in thefourth quarter.
2021 Guidance
For 2021, the company projects total revenues between RUB 315 billion and RUB 320 billion.
How Have Estimates Been Moving Since Then?
Estimates review followed a downward path over the past two months. The consensus estimate has shifted -15.22% due to these changes.
VGM Scores
Currently, Yandex has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Yandex has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Yandex N.V. (YNDX) : Free Stock Analysis Report
To read this article on Zacks.com click here.
