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Analysts Like Yelp's Treasure Trove, Even If It May Never Be Bought Out

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Analysts Like Yelp's Treasure Trove, Even If It May Never Be Bought Out

Shares of Yelp Inc (NYSE: YELP) fell 2.4 percent on Monday trading, ahead of the announcement of the company’s second-quarter financial results, scheduled for after the market closes on Tuesday.

According to Estimize, experts are modeling consensus earnings of $0.01 per share (down 75 percent year-over-year) on revenue of $133.2 million, versus guidance of $132.5 million. Below is a brief look at what four major Wall Street research firms are saying before the earnings call.

Topeka Capital Markets

Topeka’s Blake T. Harper is modeling earnings of $0.18 per share on sales of $133.1 million. The analyst maintains a Buy rating and $60.00 price target on the stock.

In a recent report, the firm noted that “Yelp has a valuable trove of information and user-generated reviews on local businesses and an efficient telesalesforce that monetizes that content with performance based and impression based advertising packages.”

Related Link: Benzinga's Top Downgrades

Increasing transactions and an expanding sales force can drive substantial growth in its Local Advertising revenues, Topeka noted. Other elements contributing to incremental upside are YP partnership and Eat24.

The analysts concluded that “With expectations and valuation reset to lower levels,” investors could expect the stock to react favorably to the company's growth.

Piper Jaffray

Piper’s Gene Munster is less optimistic and maintains a Neutral rating and $40.00 price target on the stock, as he thinks the company is “still one quarter away from fundamentals stabilizing.”

The analyst and his team are modeling earnings of $0.00 for the second quarter on revenue of $133.4 million. They believe “user growth will reaccelerate in the fall and investor sentiment will likely shift back to positive at that time,” but remain on the sidelines for now on a lack of near-term catalysts.

Brean Capital

Tom Forte of Brean Capital maintains a Buy rating and $58.00 target price on Yelp shares. He anticipates EPS of $0.02 and EBITDA of $23.2 million for the second quarter.

The analyst commented on the speculation regarding the sale of the company. “For sale or not, we believe shares of Yelp are worth a lot more than current levels and recommend investors purchase shares,” a recent report assured.

Related Link: No Help For Yelp

Cowen And Company

Cowen analysts Kevin Kopelman and Andrew Marok rate Yelp’s stock as an Outperform case and set a price target of $55.00. According to a report issued a couple of weeks ago, recent data “debunks the theory that Yelp traffic was meaningfully hurt by recent Google algorithm changes. U.S. visitors were approx. flat m/m (+20 percent y/y) at 103 million across all platforms in June, and U.S. time spent was +4 percent m/m to 1.1 billion mins (comScore).”

The firm sees revenue, and not visitors, as the focus for the second-quarter earnings call, and note the stock trades at a 35–50 percent discount to peers on an EV/S basis, despite its organic growth rate of roughly 40 percent.

Image Credit: Public Domain

Latest Ratings for YELP

DateFirmActionFromTo
Feb 2021Credit SuisseMaintainsOutperform
Feb 2021CitigroupMaintainsNeutral
Jan 2021JefferiesDowngradesBuyHold

View More Analyst Ratings for YELP
View the Latest Analyst Ratings

 

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