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Marissa Mayer's Yahoo! Still Has Questions

While much of the near-40% return year-to-date is due largely to the upcoming Alibaba IPO (Yahoo! owns a 24% stake in the Chinese Internet giant), as well as the increase in Yahoo! Japan, any turnaround in Yahoo!'s core business would be seen as a positive for the stock. "The share price does not reflect the monetization of the Asian assets and meaningful improvements in the core would lead to upside to our valuation," Anthony penned, in his note. "The risk-reward remains favorable." He has a $31 price target on Yahoo! shares.

Since taking over Yahoo!, Mayer has made mobile a major focus for the company. A revamped Weather app for Apple's (AAPL - Get Report) iOS operating system, as well as the Summly and Tumblr acquisitions, are Mayer's way of trying to take on Google (GOOG), Facebook (FB - Get Report) and others in the battle for mobile advertising dollars.

Oppenheimer analyst Jason Helfstein believes Yahoo!'s recent redesigns and new initiatives may allow it to beat estimates this quarter, as interaction improves. "We expect YHOO to report 2Q non-GAAP EPS and EBITDA slightly above consensus, on increased user engagement. Recent site redesigns have increased user interactions with YHOO products, which should offset the decrease in ad volume and command higher CPCs," Helfstein wrote, in a report.

He's also positive on the acquisitions, as the company tries to make its content sticky and keep users engaged, turning Yahoo! into what Mayer has called "a daily habit". "Longer term, YHOO's recent acquisitions should improve user engagement, especially on mobile devices, and stabilize pricing," Helfstein penned, in the note. The analyst rates shares "outperform" with a $30 price target.

If investors are able to see some kind of turnaround in display advertising, as well as an improvement in search, then shares of Yahoo! may very well continue to see upside over the coming months.

-- Written by Chris Ciaccia in New York

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