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Mark Mahaney Talks Akamai, Groupon, Yahoo ...

Thursday, 9 Feb 2012 | 1:55 PM ET

As online companies such as Akamai and Groupon made news in the past few days, renowned Internet analyst Mark Mahaney looked behind the headlines.

Akamai

“Nothing to complain about in the quarter,” Citigroup’s Mahaney said on “Fast Money.” “I thought the results were pretty strong.”

Analyst Reiterates 'Neutral' on Groupon
Mark Mahaney, analyst at Citi, explains why he gave a "neutral" rating on Groupon. He also shares his view on Yahoo! and LinkedIn.

Fundamentals were solid, but there was a competitive risk ahead for the company.

“You want to watch Amazon coming more and more into this space, and you’re looking at a stock that’s trading at a 25 P/E multiple that I think has earnings growth of 10 percent. That’s a disconnect,” he said. “We think our earnings estimates are right. It’s a sell.”

Groupon

The online-coupon company saw a sell-off after missing its estimates in its first quarterly earnings report after it went public, and Mahaney saw a rich valuation along with decent growth.

As Groupon looks to move from daily deals into goods and travel deals, it faced some uncertainty.

“Until they can prove that and continue to expand margins, it’s a hold,” he said.

Yahoo

“This is a company that’s had a lot of supervision over the last 5 years, hasn’t done a lot for them,” Mahaney said.

The analyst noted a news report that said Yahoo was looking to increase revenues via a subscription business model.

“That’s a tough shift that’s going to take years to prove,” he said, rating the stock “a strong hold.”

LinkedIn

Mahaney pointed out that the market was beginning to see companies with recent IPOs maintain their stock prices after the lockup period expires and insiders were allowed to sell their shares.

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But with a valuation of 40 times cash flow, he called LinkedIn stock “just too rich.”

“I want to buy this asset, I want to buy this management team, but not at this price,” he said.

Expedia

“This is a company that has a lot of competition,” Mahaney said, preferring competitor Priceline.com in the travel space.

Although it’s a “solid story,” he added that its stock was priced as such.

“You could correct this thing back down to 20 bucks again, we’re there,” he said. “But right now, we’re not.”


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Trader disclosure: On Feb. 9, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; J. Najarian is long CIGX; J. Najarian is long CME; J. Najarian is long CBOE; J. Najarian is long call spreads in AAPL; J. Najarian is long call spreads in BAC; J. Najarian is long call spreads in GS; J. Najarian is long call spreads in JPM; J. Najarian is long call spreads in CSCO; J. Najarian is long call spreads in IBM; J. Najarian is long call spreads in BWLD; J. Najarian is long call spreads in WHR; J. Najarian is long call spreads in GRPN; Najarian is long AAPL; Najarian is long C; Najarian is long JPM; Najarian is long MS; Najarian is long YHOO; Najarian is long PEP; Najarian is long MS; Weiss is long DMND; Cortes is long SO; Cortes is long MO; Cortes is long treasuries; Cortes is short SINA; Cortes is short SOHU; Cortes is short BAC; Cortes is short euro currency; Cortes is short Canadian dollar; Brown is long AAPL; Brown is long V; Brown is long JKH; Grasso is long ASTM; Grasso is long AVAV; Grasso is long BA; Grasso is long D; Grasso is long FIO; Grasso is long LIT; Grasso is long MHY; Grasso is long MO; Grasso is long PFE; Grasso is long PRST; Grasso is long S; Grasso is long XLU;

For Michael Walkley (AAPL)
Canaccord Genuity or any of its affiliated companies is a market maker or liquidity provider in the securities of the relevant issuer or in any related derivatives.

Canaccord Genuity intends to seek or expects to receive compensation for Corporate Finance/Investment

Banking services from the relevant issuer in the next six months.

For Mark Mahaney
Citigroup Global Markets Inc. or its affiliates beneficially owns 1% or more of any class of common equity securities of Akamai Technologies Inc, eBay Inc, Netflix Inc, Yahoo! Inc. This position reflects information available as of the prior business day.

Within the past 12 months, Citigroup Global Markets Inc. or its affiliates has acted as manager or co-manager of an offering of securities of Google Inc, Groupon, Inc.

Citigroup Global Markets Inc. or its affiliates has received compensation for investment banking services provided within the past 12 months from eBay Inc, Google Inc, Groupon, Inc.

Citigroup Global Markets Inc. or its affiliates expects to receive or intends to seek, within the next three months, compensation for investment banking services from Yahoo! Inc

Citigroup Global Markets Inc. or an affiliate received compensation for products and services other than investment banking services from Amazon.com Inc, Akamai Technologies Inc, eBay Inc, Google Inc, Groupon, Inc., Priceline.Com Inc, Yahoo! Inc in the past 12 months

Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as investment banking client(s): Groupon, Inc., eBay Inc, Google Inc, Yahoo! Inc

Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as clients, and the services provided were non-investment-banking, securities-related: Amazon.com Inc, Akamai Technologies Inc, eBay Inc, Google Inc, Groupon, Inc., Priceline.Com Inc, Yahoo! Inc

Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as clients, and the services provided were non-investment-banking, non-securities-related: Amazon.com Inc, eBay Inc, Google Inc, Groupon, Inc., Priceline.Com Inc, Yahoo! Inc

Citigroup Global Markets Inc. or an affiliate received compensation in the past 12 months from Groupon, Inc.

Analysts' compensation is determined based upon activities and services intended to benefit the investor clients of Citigroup Global Markets Inc. and its affiliates ("the Firm"). Like all Firm employees, analysts receive compensation that is impacted by overall firm profitability which includes investment banking revenues

The Firm is a market maker in the publicly traded equity securities of Amazon.com Inc, Akamai Technologies Inc, eBay Inc, Google Inc, Groupon, Inc., Netflix Inc, Priceline.Com Inc, Yahoo! Inc.

For Todd Gordon
No Disclosures

  Price   Change %Change
AKAM
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EXPE
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The Priceline Group
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YHOO
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GROUPON
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LINKEDIN
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