Stock of the Day

November 17, 2020

Yelp (YELP)

$22.30
-$0.06 (-0.2%)
Market Cap: $1.21B

About Yelp

Yelp Inc. operates a platform that connects consumers with local businesses in the United States and internationally. The company's platform covers various categories, including restaurants, shopping, beauty and fitness, health, and other categories, as well as home, local, auto, professional, pets, events, real estate, and financial services. It provides free and paid advertising products to businesses, which include cost-per-click advertising and multi-location Ad products, as well as enables businesses to deliver targeted advertising to large and high-intent audience; and business listing page products. The company also offers other services comprising Yelp Guest Manager, a subscription-based suite of front-of-house management tools for restaurants, nightlife and certain other venues, which include online reservations, a waitlist management solution that allows consumers to check wait times and join waitlists remotely, as well as through hostless kiosks, and seating and server rotation management tools; Yelp Knowledge program that offers business owners local analytics and insights through access to its historical data and other proprietary content; and Yelp Fusion, which offers free access to various basic information through publicly available APIs, and paid access to content and data for consumer-facing enterprise use. In addition, it provides content licensing, as well as allows third-party data providers to update and manage business listing information on behalf of businesses. Further, the company offers its products directly through its sales force; indirectly through partners; and online through its website and business app, as well as non-advertising partner arrangements. It has partnership with Grubhub for providing consumers with a service to place food orders for pickup and delivery. The company was incorporated in 2004 and is based in San Francisco, California.

Today's Trend

Yelp Inc. (NYSE: YELP) is facing mixed analyst signals. Zacks Research maintained a “Hold” rating, while lowering several forward earnings estimates. The revisions suggest more cautious expectations for Yelp’s near-term profitability and longer-term growth, which could weigh on investor sentiment despite the stock’s recent strength.

  • Zacks modestly raised its fiscal 2026 EPS forecast to $1.85 from $1.84, slightly above the current consensus estimate of $1.84.
  • The firm kept its “Hold” rating on Yelp. Its estimates imply EPS of $2.14 in fiscal 2027 and fiscal 2028, although the fiscal 2028 projection was subsequently reduced.
  • Zacks cut its third-quarter 2026 EPS forecast to $0.45 from $0.57 and its fourth-quarter forecast to $0.48 from $0.55, lowering expectations for second-half 2026 earnings.
  • Fiscal 2027 EPS was reduced to $2.14 from $2.28, with individual reductions for the third quarter to $0.56 from $0.64 and the fourth quarter to $0.58 from $0.66.
  • Additional cuts affected fiscal 2028: first-quarter EPS fell to $0.53 from $0.58, second-quarter EPS to $0.62 from $0.65, and full-year EPS to $2.14 from $2.32.

Overall, the small fiscal 2026 upgrade is outweighed by broad reductions to quarterly and future-year estimates. Investors are likely focused on whether Yelp can sustain earnings growth after its latest reported quarter, when revenue rose only 1.4% year over year even though EPS exceeded estimates.

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