Tigress Sees Attractive Value in Yelp

Since David Einhorn announced his position in Yelp Inc

May 3rd, shares have traded up 18% to Monday's current level of $26.70/share. The Greenlight Capital hedge fund manager isn't the only one bullish on the local advertising company, Tigress Financial's Phillip Van Deusen reiterated his Buy rating on Yelp citing an attractive long-term market and attractive valuation. Van Deusen thinks that Yelp can eat into a significant share of the $7 billion yellow page advertising market. A reason for this, is because small business owners are skewing to a younger demographic, making a more natural move to online and mobile advertising. Also, Van Deusen believes that Yelp will prove to be better ROI versus the antiquated yellow page advertising, especially in the cost per click model that will emphasize value for small business owners. As for valuation, Van Deusen projects 25% increase in revenue for Yelp next year. He believes this increase actually sides on the err of caution, as this target would be a 40% growth deceleration over the prior 12 months. With limited downside, given a re-acceleration in business performance metrics, Van Deusen finds Yelp's current valuation very attractive. Shares of Yelp were trading down 0.6% near the close of Monday's trading session at $26.68/share.