Yandex (YNDX) is Russia’s primary search engine, and it owns many other promising businesses. The fact that it is a Russian company will give some investors pause, but it is a company that’s worth taking a closer look at.

Yandex is listed on the NASDAQ and Moscow exchanges. It is a Russian company that also has a presence in Ukraine, Belarus, Kazakhstan, Turkey, and Georgia. Yandex’s main products are Yandex News, Yandex Market, Yandex Maps, Yandex Traffic, Yandex Taxi, Yandex Disk, Yandex Music, Yandex Images, Yandex Video, Yandex Money, and Yandex Metrica. To me, the four most exciting products of these are Yandex Taxi, Yandex News, Yandex Market, and, of course, the search engine.

Image source: The Moscow Times

Currently, in Russia, there are three companies competing for the smartphone taxi cab market: Uber, Gett (an Israeli company) and Yandex Taxi. There isn’t a clear winner yet out of the three, but Yandex does appear to have the most drivers. According to a Moscow Times article from May 5, 2016, Yandex has 40,000 drivers and Gett has about 36,000. Uber’s data is not currently available, but the article says that it only had one-fifth as many drivers as Yandex. Since last quarter, Yandex Taxi has expanded from 25 cities to 40 cities in Russia and five neighboring countries. So in one-quarter, it increased its number of cities by 60 percent! While it is too early to say who the eventual winner will be in Russia and its neighboring countries, Yandex looks to be in a good position (without even factoring in strong negative Russian sentiment towards American companies like Uber).

Yandex Market is a Russian e-commerce platform that has about 20 million monthly users (as of September 2016, according to the TNS Web Index). Like Yandex Taxi, Yandex Market is in an early stage, where it is more focused on growing its revenue than on maximizing its profits.

Yandex News overtook Mail.ru in May as the most popular News/Information property in Russia, according to Comscore. The total number of unique visitors to the site increased by 41 percent.

Image source: Yandex.com

The bulk of Yandex’s business is through its search engine. Ninety percent of Yandex’s Q3 revenue was from Search and Portal. Yandex is one of only three companies, other than Google, with a majority search market share in a country. The other two are Baidu in China and Naver in South Korea. Yandex’s search engine is also in Ukraine, Belarus, Kazakhstan, and Turkey. It seems as though Yandex is having a difficult time gaining market share in Turkey, but it does seem to be doing well in Ukraine, Belarus, and Kazakhstan, partially due to those countries also using Cyrillic characters, making it easier for Yandex to optimize the local language for search than for Google. The only thing that worries me about Yandex’s search engine is that it only has 38 percent of the mobile market share. Yandex’s COO expects that to change when, next quarter, there will be more mobile devices shipping with Yandex apps in better positions on the device.

Yandex’s P/E ratio is currently at about 47, but if you factor in that earnings are forecasted to increase by 44 percent in 2017, it’s P/E would be about 28. I realize that using P/E as a metric for internet stocks works differently than with other industries, but 47 for its current earnings does feel pretty high, especially considering that it is a Russian company with a lot of political and currency risk.

I don’t consider myself an expert on technical analysis, but the chart for Yandex also does not particularly appealing. It was trading within the range of 20 to 23 from June to October 12, after which it went down. It also looks like it might have formed a head and shoulders top in which the neckline has been broken.

Overall, with Yandex, you have a company that is the dominant search engine in its marketplace (BIDU and GOOGL are the only other investible companies where that is also the case), with a lot of room and opportunity for growth, both through its projected increase in revenue growth on its Russian search engine or expansion of its market share in other countries, such as Ukraine. Yandex Market and Yandex Taxi also have a good chance of becoming big earnings sources, but probably not for a couple of years. There seems to be plenty of opportunity for growth, but with Yandex’s current valuation and its exposure to Russian political risk and currency risk, it does feel a bit expensive. With the technicals also not looking great, I would wait for the price to fall a bit more before buying, but I think that Yandex will be a good long-term investment.