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Why Yandex Stock Rose 15% in July

By Keith Noonan - Updated Aug 9, 2020 at 3:40PM

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The Russian tech company posted solid Q2 results and completed a deal for sole ownership of its e-commerce business.

What happened

Shares of Yandex (YNDX -6.79%) rose 15% in July, according to data from S&P Global Market Intelligence. The company's stock climbed thanks to momentum for the broader market, positive analyst coverage, and better-than-expected second quarter results. 

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^SPX data by YCharts

Image source: YCharts.

The Russia-based search engine and ride hailing company also completed a reorganization of its e-commerce and payment services joint ventures with Sberbank. Yandex stock is now up roughly 36% year to date. 

A person touching a search bar.

Image source: Getty Images.

So what

As per a press release published on July 23, Yandex now fully owns the e-commerce platform Yandex.Market and has given up its position in the electronics payments business Yandex.Money. All non-compete agreements between the two companies in the financial services category have been dissolved, and Yandex paid 39.6 billion Russian rubles to Sberbank as part of the deal.

Yandex then published its second quarter results on July 28. The company's revenue came in at 41.4 billion rubles ($591.9 million), down roughly 10% year over year on a U.S. currency basis but flat in terms of local currency. The company posted a loss per share in the period of $0.14, while the average analyst estimate had called for a per-share loss of $0.16 on sales of $579.1 million.

The earnings release was followed by a new note on Yandex from Deutsche Bank analyst Lloyd Walmsley on July 29, maintaining a "buy" rating on the stock. Walmsley also hiked his one-year price target from $56 to $65 per share. 

Now what

Yandex stock has continued to climb in August's trading. The company's share price is up roughly 3% in the month so far. 

^SPX Chart

^SPX data by YCharts

Image source: YCharts.

The company opted not to provide third quarter guidance and also said that it wasn't planning provide full-year guidance due to uncertainties related to the coronavirus pandemic. 

Yandex has a market capitalization of roughly $20.7 billion. The tech company is valued at roughly 74 times this year's expected earnings and 6.8 times this year's expected sales. 

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Yandex. The Motley Fool has a disclosure policy.

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Yandex N.V. Stock Quote
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