Yahoo stock has soared nearly 90% in the past year, and CEO Marissa Mayer deserves much of the credit.
Yahoo! Inc. (Nasdaq: YHOO) was seriously ailing when Mayer came on board a year ago. Many analysts placed Yahoo stock on "death watch" and readied to send it to Internet stock graveyard.
Mayer has undeniably made progress as she finishes her first year at the helm.
"She's done a great job," Money Morning Capital Wave Strategist Shah Gilani told FOX's Stuart Varney on Tuesday. "She's done a terrific PR job for the stock."
The question for investors: With shares up more than 70% in Mayer's first year - and another 10.38% today to $29.67 - is there still time to profit from Mayer's success, or did they miss the boat on Yahoo stock?
Yahoo Stock: Still a Buy with Weak Earnings?
Despite Mayer's hard work, Gilani thinks the explosive Yahoo stock gains could be nearing an end.
"I think it's fairly fully priced," Gilani told Varney. "[Mayer's] done a great job, but company-wise, I'm not really impressed."
While numbers released yesterday (Tuesday) showed earnings rose 46%, revenue slid 7% from a year ago, a problem that continues to plague the company despite some hints of improvement.
Yahoo earned $331 million, or $0.30 per share, in the three months ending in June. That compares to $227 million, or $0.18, in the same period a year earlier. Revenue totaled $1.14 billion, down from $1.22 billion.
But the news wasn't all bad for Mayer...
Displaying her prowess as CEO, Mayer successfully overhauled many of Yahoo's core products, like online photo sharing management and smartphone app Flickr.
She got rid of some 30 products Yahoo visitors weren't using, and acquired 17 companies during her first year. Those included Summly, an app that condenses content for smartphones, for $30 million, and Tumblr, an increasingly popular blog site. Many balked at the whopping $1.1 billion Tumblr price tag, but the deal got people taking again about Yahoo.
Talking of Tumblr, Mayer said, "Since the deal, Tumblr's growth has seen an acceleration, with almost a quarter of a million new blogs being set up each day."
However, that growth isn't adding revenue, and won't for a while - Mayer admitted that Tumblr won't provide "meaningful revenue" this year.
Additionally, Yahoo trimmed its full year revenue guidance to $4.45-$4.55 billion, from $4.5-$4.6 billion.
This is part of the reason Gilani isn't impressed with buying Yahoo stock now.
"Seventeen acquisitions and none of them really are making money. The time to integrate those into the 'greater Yahoo!' will be lengthy," said Gilani. "And their ad sales are slipping - slipped 11% in the first quarter."
There is one reason Gilani would consider owning Yahoo stock...
Alibaba, the Chinese e-commerce company in which Yahoo owns a 24% stake,, is rumored to be going public. Gilani told Varney that rumors this week hinted that Goldman and Credit Suisse could be bringing it out, and that would give investors a nice pop.
Alibaba nearly tripled its net income in the first three months of the year and increased revenue by 71%.
Alibaba's strong performance helped drive Yahoo stock's gains today to a five-year high.
But until Yahoo starts making money on what it has spent, there's no other reason to buy.
Yahoo (Nasdaq: YHOO) Gets Hit By Competition
The uninspiring revenue growth reflects Yahoo's struggles selling more digital advertising even as marketers increase their spending at rival sites like Google Inc. (Nasdaq: GOOG) and Facebook Inc. (Nasdaq: FB). Moreover, plenty of the spending is in mobile, an area where Yahoo is sorely lacking presence.
Indeed, Google grabbed half of all mobile ad revenue in 2012. The Internet search giant collected $4.61 billion in mobile ad revenue worldwide last year, more than half the $8.8 billion ad market, and almost a third of all digital ad spending in 2012, according to eMarketer.
This year, Google's share is projected to rise to 56% from 52%, hitting $8.84 billion.
Facebook took the second-largest shares of mobile ad dollars last year with $470 million. This year, the social network leader's ad revenue is expected to climb 334% to $2.04 billion.
Meanwhile, Yahoo's ad display revenue in Q2 came in at $423 million, an 11% decrease.
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