Yahoos shares nearly doubled in the past year as investors pinned their hopes on Mayer and surging growth at Chinese online retailer Alibaba, in which Yahoo holds a big stake.
At least four brokerages lowered their price targets on Yahoos stock, which fell to a low of $35.30 in early trading on Wednesday.
Yahoo on Tuesday reported a decline in online advertising prices and slower growth at Alibaba.
(Also see: Yahoo reports drop in revenue as prices of online ads slide)
Yahoos overall revenue fell 6 percent in the last three months of the year to $1.266 billion, marking four consecutive quarters of eroding revenue.
The drop in revenue was largely driven by a 7 percent decline in ad unit pricing due to a shift to mobile, where ad rates were lower, and from the roll-out of a new ad format where volumes were strong but pricing was lower, SunTrust Robinson Humphrey analyst Robert Peck said.
Mayer, after taking take over in July 2012, moved aggressively to kick-start the company with product makeovers, acquisitions and big media hires. But the ad sales business continues to struggle when at a time rivals Google and Facebook are posting strong revenue growth.
Alibaba posted revenue growth of 51 percent during the July-September quarter, after setting a breakneck pace during the first two quarters of 2013.
"Alibaba remains the prime attraction, though its 3Q13 was perhaps a bit less robust than recent quarters," CRT Capital analyst Neil Doshi wrote in a research report.
The brokerage cut its price target on the stock to $47 from $52.
But Doshi said Alibabas revenue growth could show signs of acceleration when Yahoo reports the Chinese companys fourth-quarter results. That period will include Singles Day (November 11), one of the biggest shopping days of the year in China.
Yahoo reports Alibabas results one quarter in arrears as part of its own financial disclosures.
Analysts have estimated that Yahoos Asian assets - Alibaba and Yahoo Japan - comprise about three-quarters of Yahoos nearly $40 billion market valuation.
Some analysts raised their price targets on Yahoos stock, citing the growth potential of Alibaba and another Yahoo asset, blogging service Tumblr.
"We think Tumblr may actually be capable of creating as much value as Yahoos core (business)," Bernstein Research analyst Carlos Kirjner wrote in a note.
© Thomson Reuters 2014
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