Yandex NV (NASDAQ:YNDX) presents a fundamentally attractive investment opportunity if recent price action activity is anything to go by. The Stock has started showing signs of bottoming out, on plunging to a key support level. One of the catalysts supporting a potential bounce back from current lows is a recent earnings report that details accelerated revenue growth.
Yandex Price Analysis
The stock’s sentiments have also inched a notch higher on investors taking note of the company’s healthy core advertising business. Market share gains on Android as well as success in other supplementary businesses continue to strengthen investors’ confidence in the stock.
The $26 a share mark has emerged as a key support level from where Yandex is trying to bounce back. The formation of a double bottom could as well point to waning sell-off momentum an indication that bulls are slowly coming in.
After the recent spike higher, Yandex needs to rise and stabilize above the $31 a share mark. Above the critical resistance level, the stock should be on its way to the $37 a share handle, the next substantial support level. A breach of the $26 a share handle, on the other hand, could leave the stock vulnerable to further declines in continuation of the recent sell-off wave.
Yandex delivered the fastest top line growth in six years as its Q3 earnings report showed revenue rose 39% in the quarter. Q3 revenue increased 39% to $496 million beating consensus estimates of $468 million as adjusted net income surged 167% to $91.3 million or $0.27 a share.
The company exited the quarter with $1.4 billion in cash. Buoyed by Q3 earnings, the company has consequently increased its outlook for total revenues. Full year revenues should increase by between 35% and 38% compared to 2017 levels.
Yandex Diversification Drive
The growth came at the backdrop of successful new product launches, as the Russian Internet giant continued to diversify its offerings. The company has unveiled new product launches in recent months as it continues to expand its ecosystem.
For starters, the company has launched a smart speaker device dubbed Yandex. Station as it moves to battle for market share on the $11.8 billion smart device marketplace. Yandex has also expanded its footprint into the public cloud computing market with the launch of Yandex. Cloud.
In pursuit of opportunities in China’s lucrative $258 billion international tourism industry, Yandex has integrated Tencent’s WeChat Pay into its Yandex. Checkout. The integration will allow Russian merchants to address the needs of Chinese tourists visiting the country when it comes to payments.
Yandex has also moved to take advantage of it’s nearly 60% market share in domestic internet search in Russia with the launch of a smartphone. The search giant has launched Yandex. Phone its first smartphone.
Smartphone sales were up by 25% year over year in the second quarter in Russia something that justifies Yandex entry into the somehow crowded marketplace.
In addition, the Russian internet giant is also targeting opportunities in Israel; the company is in the process of launching its taxi-hailing service in the country under a new brand name Yango. In a bid to shrug off competition from local ride-hailing competitor Gett, Yandex intends to offer sales and promotions to make rides cheaper.
While Yandex has taken a significant hit in the market, one cannot dispute the fact that the company is in a phase of robust growth. Revenue and earnings growth in the recent quarter is a testament to increased operational efficiency.
The Russian internet giant has also moved to diversify its empire by venturing into new businesses with robust growth opportunities. That said Yandex is a fundamentally attractive long-term investment play at the back of an aggressive expansion drive despite the recent sell-off.