UPDATE: Oppenheimer Initiates Perform Rating on Yelp

Oppenheimer initiates its coverage on Yelp

with a Perform rating and a $23 price target as it believes current valuation is robust and among the highest in the Consumer Internet sector. Oppenheimer comments, "n. Yelp is a leading internet destination for consumer reviews of local businesses. As of December 31, 2011, the company had an average of 66 million monthly unique visitors in 71 markets (46 in U.S., 25 international), and had 25 million reviews of local businesses on its platform. Yelp shares are currently trading at 9.2x estimated 2013 sales, the highest valuation among the Consumer Internet universe. Our $23 price target assumes 8x terminal 2018 EBITDA of $290 million discounted back at 10% to 2013. This implies a 2013 EV/sales ratio of 8.6x, still at the very high end of its consumer Internet peers." YELP closed at $25.81 yesterday.