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Good question, Highlighter99.
I'm not familiar with Morningstar's process of calculating Fair Value, but here's my theory on why Yahoo is priced at such a premium to Morningstar's metric.
I'm assuming the Fair Value metric is determined based at least partly on current profitability of the company. If this is the case, Microsoft and AOL would be easier companies to value Fairly than Yahoo. Although each company competes online, the changes in the economy and online advertising have effected Yahoo more than the other companies listed. Due to the significant drop in current profits, the Fair Value would look out of whack.
However, many investors in YHOO see this as a company that will emerge from the current downturn in profits and economy to be one of only a few large portals with a profitable business model.
So, as with any other company, the stock is being valued based on future earnings. Unfortunately, the crystal ball is a little fuzzy, but I'm one of the faithful who thinks Yahoo will figure our how to make a buck or two on all those users.
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