NEW YORK (TheStreet) -- Yahoo! (YHOO)  shares are rallying 5.39% to $35.20 on Tuesday, boosted by Alibaba Group Holding's (BABA) solid quarterly earnings that beat analysts' forecasts. 

The Internet giant currently has a 15% stake in Alibaba, but going forward, it's focusing on spinning off its stake even without the IRS approval, Fortune noted.

In the second quarter of fiscal 2016, Alibaba earned 57 cents a share on revenue of $3.49 billion.

Analysts had expected the company to earn 54 cents a share on revenue of $3.39 billion.

Alibaba's revenue grew 32% from the previous year's revenue of $2.74 billion, helped by a rise in gross merchandise volume and monetization rate.

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Separately, Yahoo! for the first time on Sunday live-streamed the NFL game between the Jacksonville Jaguars and Buffalo Bills. More than 15.2 million people tuned in to watch, according to CNBC.com

"We're thrilled with the results of our initial step distributing an NFL game to a worldwide audience and with the work of our partner, Yahoo!," stated Hans Schroeder, NFL's senior VP of media strategy, business development and sales.

Separately, TheStreet Ratings team rates YAHOO INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

We rate YAHOO INC (YHOO) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.2%. Since the same quarter one year prior, revenues slightly increased by 6.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Although YHOO's debt-to-equity ratio of 0.04 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 5.09, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for YAHOO INC is rather high; currently it is at 67.91%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, YHOO's net profit margin of 6.22% is significantly lower than the industry average.
  • Net operating cash flow has significantly decreased to $137.28 million or 52.53% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The share price of YAHOO INC has not done very well: it is down 24.60% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • You can view the full analysis from the report here: YHOO