What is the Yahoo! Inc. (YHOO) Growth Trajectory?

Yahoo! Inc. (NASDAQ:YHOO) has gathered its share of headlines over the last few days, recognizing the changes and transformations that the company has undergone in the year since former Google Inc (NASDAQ:GOOG) executive Marissa Mayer took over as CEO. The company has been aggressive in picking up some opportunities in social media – highlighted by the $1 billion purchase of Tumblr – and expanding its services while improving its marketing and growing its mobile presence. That has ultimately been the largest development that has made the biggest difference in the company’s visibility.

Yahoo! Inc. (NASDAQ:YHOO)

Yahoo! woohoo?

While Yahoo! Inc. (NASDAQ:YHOO) has made tremendous progress in mobile – something that has been a struggle for tech compatriots like Facebook Inc (NASDAQ:FB), at least in terms of monetization – and some are celebrating Mayer’s progress after a year at the helm, but now it’s time for analysts to ask, what does the company’s growth trajectory look like?

A couple of analysts – Scott Kessler of S&P Capital IQ and Roger Cheng, executive editor of CNET News – debated the prospects for Yahoo! Inc. (NASDAQ:YHOO) for the short- and long-term future during a recent segment on CNBC.

“This stock has done tremendously well, as a lot of people will undoubtedly know,” Kessler said. “It’s up more than 80 percent year-to-date, and about 130 percent since Marissa Mayer took over as CEO. But the reality is that, in our view, this largely reflects the significant stake in Alibaba Group (which is due to hold an IPO in the coming weeks), as well as large buyback activity in the last number of years. Growth has been lacking and difficult to find, especially on a consistent basis. As of now, though, Yahoo is not a growth story.”

“There has definitely been a Marissa Mayer effect,” Cheng said about Yahoo! Inc. (NASDAQ:YTHOO). “She has been busy transforming the company. What we’re seeing right now is Yahoo! make the shift from a simple search company to more of an entertainment company. She wants to entertain, be more mobile. She has bought 23 companies in the past year, and she is positioning the company for growth. Whether that growth will ever come, of course, is still unclear.”

See the entire segment about Yahoo! Inc. (NASDAQ:YHOO) and the analysis by Kessler and Cheng below.

 

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