Expect 'Another Clean Quarter' When Yelp Reports

Brean Capital on Monday issued a company update on Yelp Inc YELP ahead of the company's 4Q15 earnings announcement, which is expected on February 8. Brean rates Yelp as a Buy with a $40 price target.

Analyst Tim Forte wrote, "We are looking for further indications that its Yelp Platform efforts (including its February 2015 acquisition of Eat24) are taking hold, with the potential to serve as a catalyst to both further transactions and advertising sales...We will be listening for commentary from management on its own plans to remain independent, as we continue to see more value in the shares than is currently reflected in the share price."

Brean Capital gave two key takeaways that could drive Yelp's shares higher in 2016:

1. Advancing the Yelp Platform

Analysts are looking for further color on the company's efforts to expand their platform into one that a user can research a business and conduct business (such as making a dinner reservation) without leaving the application. This has the potential into increase consumer usage of the app and drive the company's top-line growth through an increase in advertising revenue.

2. Appointment of a new Chief Revenue Officer

Jed Nachman was named CRO in early January after being with the company since 2007. Brean believes that his leadership and industry knowledge and improve Yelp's monetization efforts and drive market share growth.