SunTrust's Bob Peck Reviews Yelp Earnings

In a report published Thursday, SunTrust Robinson Humphrey analysts maintained a Buy rating on Yelp Inc YELP, while reducing the price target from $70 to $52. Yelp reported disappointing 1Q15 results with revenues short of expectations. The miss is largely attributable to currency headwinds and disruption due to salesforce realignment by the company. The company's quarterly EBITDA was short of consensus due to lower revenues from high-margin brands and the salesforce realignment. Yelp has, however, reaffirmed its full-year guidance implying "growth reacceleration in 2H" driven by "continued bolstering of the sales force and CPC offerings (Local), launch of mobile programmatic (Brand), Eat24 (Other), and ramp of marketing spend," the analysts mentioned. The company continues to target >$1B in revenue in 2017. The analysts see "a strong core (local ad revs +51%), opportunity around Int'l, Eat24, and SeatMe, and optionality around M&A," while adding, "...pending initiatives around sales hires, CPC, and mobile programmatic should contribute near term." The EPS estimates for 2015 and 2016 have been reduced from $0.58 to $0.57 and from $1.07 to $1.02, respectively.