Last Updated: 16 Sep 2024
Executive Summary
Yelp Inc. (NYSE: YELP) is a leading online platform connecting consumers with local businesses. With a market capitalization of $2.3 billion, Yelp has a strong financial position with growing revenue, profitability, and margins. Despite facing industry headwinds, the company's fundamentals remain solid, supported by its large user base, strong brand recognition, and innovative products.
Company Overview
Founded in 2004, Yelp operates a comprehensive platform that includes business listings, reviews, and other user-generated content. The company generates revenue through advertising, subscriptions, and other services. Yelp's platform is used by millions of consumers and businesses worldwide, making it a valuable resource for local commerce.
Fundamental Analysis
Revenue: Yelp's revenue has grown steadily in recent years, reaching $1.38 billion in the trailing twelve months (TTM). The company's revenue growth is driven by increased advertising revenue and subscription fees.
Profitability: Yelp's profitability has improved significantly in recent quarters. The company's operating margin TTM is 11.1%, and its net income margin TTM is 10%.
Margins: Yelp's gross profit margin TTM is 78.7%, indicating the company's ability to generate significant revenue from its advertising and subscription services.
EPS: Yelp's diluted EPS TTM is $1.89, reflecting the company's strong profitability.
Technical Analysis
Price Action: Yelp's stock price has been trending lower in recent months, reaching a 52-week low of $32.56 in June 2023. The stock is currently trading at $34.44, below its 50-day moving average ($35.0) and 200-day moving average ($39.24).
Support and Resistance: The key support level for Yelp is $32.56, while the key resistance level is $48.99. A break above $48.99 could signal a potential reversal in the stock's downtrend.
Short Term Outlook
In the short term, Yelp's stock price may continue to face pressure due to industry headwinds and broader market volatility. The company's revenue growth may slow in the coming quarters, and its profitability may be impacted by increased competition.
Long Term Outlook
In the long term, Yelp has a strong competitive position and significant growth potential. The company's large user base, strong brand recognition, and innovative products position it well to capitalize on the growing local commerce market.
Analyst Recommendations
Analysts have a mixed view on Yelp's stock. Two analysts recommend buying the stock, while eight recommend holding it. One analyst recommends selling the stock. The average analyst target price is $41.
