Wunderlich Comments On Yelp Following A 'Solid' Q2

Early Thursday morning, Wunderlich issued a note in which CFA Blake T. Harper provided details on his outlook for Yelp YELP as the company moves forward.

Harper began the note commenting, "The company posted its first ever GAAP profit and has leverage in the model that we believe could lead to accelerating earnings growth. We maintain our Buy rating and $105 price target."

Harper noted that Yelp introduced new features to drive engagement, such as the ability to post videos, message businesses directly and make reservations using a SeatMe lite feature. He added that Yelp's user generated content, as well as its mobile platform are its strongest competitive advantages.

Based on the company's results, Harper has raised his sales, EBITDA and EPS estimates for the third quarter from $96.7 million, $18 million and $0.17 to $99.6, $20.1 and $0.19, respectively. Harper said the new estimates reflect faster revenue growth and operating leverage.

Shares of Yelp are down over six percent to ~$71 in the pre-market session on Thursday. This comes after shares finished the day up 8.81 percent on Wednesday and spiked up another ~8 percent after the close.