Yahoo beat on earnings Tuesday but its revenue outlook fell short. Mayer was upbeat about the company's progress but analysts said there's still a lot of work to do.
Yahoo said it expects revenue excluding traffic acquisition costs (TAC) of $1.06 billion to $1.1 billion. Analysts currently expect revenue of $1.12 billion, according to Thomson Reuters.
The stock, which has jumped about 70 percent since Marissa Mayer took over as CEO a year ago, initially fell in after-hours trading but then bobbed into positive territory.
"Mostly the gains [in the stock] have been Marissa Mayer's star power, her connections throughout Silicon Valley and her acquisition strategy … but the core business has been relatively stagnant," Roger Kay, founder of Endpoint Technologies, said on CNBC's "Closing Bell."
But Mayer remained upbeat about the core business.
"I'm encouraged by Yahoo!'s performance in the second quarter. Our business saw continued stability, and we launched more products than ever before, introducing a significant new product almost every week," said Yahoo! CEO Marissa Mayer in a statement.
What's the stock doing now? (Click here for the latest after-hours quote)