With a 95% gain for the stock this year so far, it’s pretty clear that Yahoo (YHOO) investors have continued to give new(ish) CEO Marissa Mayer the benefit of the doubt. That runup may have been a serious error in judgment, however.
After a year and a half at the helm, Mayer’s Yahoo is only expected to grow the bottom line by about 14% next year. That hardly justifies the forward-looking P/E of 23.4. The market may soon begin to acknowledge that the Mayer-driven turnaround might not happen after all, causing YHOO stock to deflate.