NEW YORK ( TheStreet) -- It's been a year since Yahoo! ( YHOO) gave the CEO suite to Marissa Mayer. After several acquisitions and a re-energizing of the company and its employees, it's time for Mayer to demonstrate that Yahoo!'s turnaround is for real. Sunnyvale, Calif.-based Yahoo! has experienced an incredible run in its share price performance since Mayer took over, but that's largely due to the continued monetization of its Asian assets, a huge share buyback, and continued optimism in the new CEO. Revenue growth at core Yahoo!, however, which includes search, and display advertising, has largely been lackluster. That's not expected to change this quarter, says Cantor Fitzgerald analyst Youssef Squali. "We expect Yahoo!'s 2Q results to be in-line with muted expectations on Tuesday, 7/16," Squali wrote in his note. "Operationally, 2013 remains a year of investments and acquisitions, setting the stage for what we believe will be a resumption of growth in 2014." Squali rates shares "buy" with a $30 price target. Analysts polled by Thomson Reuters expect Yahoo! to earn 38 cents a share on sales of $1.074 billion. Analysts surveyed by Estimize are looking for 34 cents a share on $1.09 billion in revenue. Mayer is trying to turn around core Yahoo!, and is doing it largely through acquisitions. The most notable was the recent $1 billion purchase of Tumblr. However, some smaller acquisitions, including Summly and Jybe, are also part of the Yahoo! turnaround plan. These acquisitions aim to rebuild Yahoo!'s core, which includes search and display, and take advantage of the company's 700 million unique visitors per month. Some of Yahoo!'s properties, including Finance, and Sports, are amongst the most visited properties on the Web, but revenue growth remains stagnant. Topeka Capital Markets analyst Victor Anthony, who rates shares "buy," believes that traffic has firmed. "Traffic trends have firmed in the quarter and the recent spate of acquisitions and programming content deals signals bold steps to improve the core," Anthony wrote in his report.
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) iOS operating system, as well as the Summly and Tumblr acquisitions, are Mayer's way of trying to take on Google ( GOOG), Facebook ( FB) 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 >Contact by Email. Follow @Chris_Ciaccia