Yandex - Riding the Opportunity
We see 40% upside from the valuation of the Yandex.Taxi JV deal, based on our top-down analysis of Russia's shared transport market. We expect Yandex to be the main beneficiary of the market's growth (to R1.6 trln by 2025) and see it capturing a share of around 50%. Excluding taxi and e-commerce, Yandex is trading below the historical average at an 11.1 2018E EV/EBITDA, which is unjustified given its healthy 2017-20E EBITDA CAGR of 19.6%. The above factors have caused us to raise our target price by 30% to $50.90 per share.Yandex is an internet and technology company that operates an internet search engine in Russia. Co. builds intelligent products and services powered by machine learning. Co.'s products and services are based on complex, unique technologies that are not easily replicated. Co. generates substantially all of its revenues from online advertising. Co. also generates revenues from its e-commerce offerings, classifieds and e-hailing service. Co.'s businesses are organized in the following operating segments: Search and Portal; E-commerce; Taxi; Classifieds and Experimental businesses.
Sberbank CIB Investment Research is a research firm offering equity, fixed income, economics, and strategy research. It covers analysis on all aspects of Russia’s capital markets, issues and industries. The firm analyzes trends in Russia and combines local knowledge with a global perspective. It processes macroeconomic data, market and company-specific news, stock quotes and other information for providing research reports. The firm provides details and latest prices on the most traded names and most traded paper on all segments Russian market. In strategy research, it provides thematic research, tips and descriptions of the methodology used to evaluate companies.
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