- The share price of Yelp, Inc (NYSE: YELP) has fallen more than 49 percent in the last three months.
- Citi’s Mark May has maintained a Buy rating on Yelp, while lowering the price target from $35 to $30.
- The estimates for the company have also been lowered to better reflect the loss of brand revenue.
“We are updating our model to more accurately account for the company’s decision to deemphasize Brand advertising in 2016 as well as for increased sales and marketing spend,” May explained.
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Brand revenue had previously been estimated about $26 million for 2016, more or less flat year on year. However, following Yelp’s decision to deemphasize the business, the revenue estimate has been lowered to $13 million.
The sales and marketing expense estimate has, however, been raised, to reflect “increased competition for new hires in YELP’s core Bay Area market,” the Citi report stated.
In addition, the CY15 and CY16 EBITDA estimates have been lowered to account for the loss of the high-margin Brand revenue, along with increased sales and marketing expenses.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.