This Yelp Bear Is Worried About Competition

• Yelp, Inc. YELP shares have declined more than 59 percent, year to date.
• Northland Capital’s Darren Aftahi has maintained an Underperform rating on the company, while lowering the price target from $21.50 to $17.75.
• Aftahi believes that new features added to local search by competitors would intensify the competition for Yelp.

According to the Northland Capital report, Facebook, Inc. FB, Google, Inc. GOOGL and Amazon.com, Inc. AMZN “have recently added feature sets that we believe are aimed squarely at local search, particularly around small business discovery and commerce.”

The new features focus on improving local search and discovery and include tools to enable easier communication between businesses and consumers. This, Aftahi believes makes Facebook and Google very similar to Yelp.

Earlier, Apple, Inc. AAPL had added the “swipe right” feature, which had the potential to help increase Yelp’s brand awareness and lead to a near term increase in Yelp app downloads.

However, Aftahi believes that in the long term, this feature “may translate into lower engagement on the Yelp app.”

“With a growing list of alternative means to find local businesses easily, we remain cautious on Yelp’s growth prospects,” Aftahi added.