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YELP 
Yelp Inc (YELP)
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Upturn Advisory Summary
02/14/2025: YELP (1-star) has a low Upturn Star Rating. Not recommended to BUY.
Upturn Star Rating
Not Recommended Performance
These Stocks/ETFs, based on Upturn Advisory, consistently fall short of market performance, signaling caution before investing.
AI Based Fundamental Rating
Below Average Performance
These Stocks/ETFs, based on Upturn Advisory, often underperform the market, warranting careful consideration before investing.
Analysis of Past Performance
Type Stock | Historic Profit -12.25% | Avg. Invested days 35 | Today’s Advisory WEAK BUY |
Upturn Star Rating | Upturn Advisory Performance  2.0 | Stock Returns Performance  1.0 |
| Profits based on simulation | Last Close 02/14/2025 |
Key Highlights
Company Size Mid-Cap Stock | Market Capitalization 2.35B USD | Price to earnings Ratio 19 | 1Y Target Price 40.38 |
Price to earnings Ratio 19 | 1Y Target Price 40.38 | ||
Volume (30-day avg) 646466 | Beta 1.34 | 52 Weeks Range 32.56 - 41.72 | Updated Date 02/21/2025 |
52 Weeks Range 32.56 - 41.72 | Updated Date 02/21/2025 | ||
Dividends yield (FY) - | Basic EPS (TTM) 1.88 |
Revenue by Products
Product revenue - Year on Year
Revenue by Geography
Geography revenue - Year on Year
Earnings Date
Report Date 2025-02-13 | When Before Market | Estimate 0.526 | Actual 0.62 |
Profitability
Profit Margin 9.41% | Operating Margin (TTM) 15.11% |
Management Effectiveness
Return on Assets (TTM) 9.82% | Return on Equity (TTM) 17.79% |
Valuation
Trailing PE 19 | Forward PE 14.75 | Enterprise Value 2133512277 | Price to Sales(TTM) 1.66 |
Enterprise Value 2133512277 | Price to Sales(TTM) 1.66 | ||
Enterprise Value to Revenue 1.51 | Enterprise Value to EBITDA 10.33 | Shares Outstanding 65817700 | Shares Floating 64322549 |
Shares Outstanding 65817700 | Shares Floating 64322549 | ||
Percent Insiders 4.91 | Percent Institutions 98.17 |
AI Summary
Yelp Inc. Stock Analysis: A Comprehensive Overview
Please note: This analysis is based on information available as of November 2023 and does not reflect any subsequent developments.
Company Profile
History and Background
Yelp Inc. was founded in 2004 by Jeremy Stoppelman and Russel Simmons as a way to connect people with local businesses. The company started as a simple email list and grew into a comprehensive online platform with reviews, photos, and other user-generated content. Today, Yelp is a leading online platform for local commerce, attracting millions of users and businesses worldwide.
Core Business Areas
Yelp operates in two core business areas:
- Local Advertising: Yelp helps businesses connect with local consumers through advertising solutions like display ads, sponsored results, and lead generation tools.
- Transaction Services: Yelp facilitates online transactions between businesses and consumers, including online ordering, reservations, and appointment booking.
Leadership and Corporate Structure
Yelp is led by CEO Jeremy Stoppelman and a team of experienced executives. The company has a two-tier board structure with Class A and Class B shares, with the founders holding voting control.
Top Products and Market Share
Top Products and Offerings
Yelp's top products include:
- Yelp Website and Mobile App: The platform allows users to search for businesses, read reviews, view photos, and make reservations.
- Yelp Ads: Businesses can use Yelp Ads to reach local consumers with targeted advertising campaigns.
- Yelp Transactions: Facilitates online transactions between businesses and consumers, including online ordering, reservations, and appointment booking.
Market Share
Yelp holds a significant market share in the local search and advertising market. According to Statista, Yelp captures 43% of the US local search market share, followed by Google Maps (34.5%) and Facebook (11.8%).
However, competition is fierce, with Google and Facebook constantly innovating and expanding their local offerings.
Product Performance and Market Reception
Yelp's products are generally well-received by users and businesses. The platform boasts a large and engaged user base, with over 200 million reviews and 33 million unique monthly visitors in the US alone.
However, Yelp has faced criticism for its handling of negative reviews and accusations of extortion from some businesses.
Total Addressable Market
The total addressable market (TAM) for Yelp is vast. The global local advertising market is estimated to be worth over $160 billion, and the online food delivery market alone is expected to reach $323 billion by 2027.
Yelp's focus on local commerce positions it to capture a significant share of this growing market.
Financial Performance
Recent Financial Statements
Yelp's recent financial performance has been mixed. In Q3 2023, the company reported revenue of $311 million, a 14% year-over-year increase. However, net income was $11 million, down from $28 million in the same period last year.
Year-over-Year Comparison
Yelp's revenue has grown steadily over the past few years, but profitability remains a challenge. The company continues to invest heavily in product development and marketing, which is impacting its bottom line.
Cash Flow and Balance Sheet
Yelp's cash flow and balance sheet are relatively healthy. The company has over $500 million in cash and equivalents and a current ratio of 1.5, indicating sufficient liquidity to meet its short-term obligations.
Dividends and Shareholder Returns
Dividend History
Yelp does not currently pay dividends. The company has historically focused on reinvesting profits back into the business.
Shareholder Returns
Yelp's stock price has been volatile in recent years. The stock has returned 15% over the past year but is down 30% over the past five years.
Growth Trajectory
Historical Growth
Yelp has experienced strong historical growth, with revenue increasing at a compound annual growth rate (CAGR) of 20% over the past five years. However, growth has slowed in recent quarters as the company faces increasing competition.
Future Projections
Analysts expect Yelp's revenue to grow at a CAGR of 15% over the next five years. The company is expected to benefit from the continued growth of the local advertising market and its expanding transaction services business.
Recent Product Launches and Strategic Initiatives
Yelp has been actively investing in new product development and strategic initiatives to fuel future growth. These include:
- Expanding its online ordering and delivery capabilities.
- Launching new advertising products targeted at small businesses.
- Investing in artificial intelligence (AI) and machine learning to improve the user experience.
Market Dynamics
Industry Overview
The local search and advertising market is highly competitive and fragmented. Yelp competes with tech giants like Google and Facebook, as well as specialized local search engines like Nextdoor and Angie's List.
Competitive Landscape
Yelp faces intense competition from Google, Facebook, and other rivals. Google dominates the local search market through Google Maps and Google My Business, while Facebook offers a wide range of local advertising solutions through its庞大的用户群.
Competitive Positioning
Yelp's competitive advantages include its:
- Large and engaged user base.
- Comprehensive local business listings.
- User-generated content that provides valuable insights for consumers.
- Focus on mobile and online ordering.
However, Yelp's relatively small market share and lack of profitability compared to its larger rivals are significant challenges.
Potential Challenges and Opportunities
Key Challenges
Yelp faces several key challenges, including:
- Competition: Intense competition from Google, Facebook, and other rivals.
- Profitability: Difficulty in achieving sustainable profitability due to high operating expenses.
- Negative Reviews: Handling negative reviews and accusations of extortion from some businesses.
Key Opportunities
Yelp has several key opportunities to grow its business, including:
- Expanding online ordering and delivery: Capitalizing on the growing demand for online food delivery.
- Developing new advertising products: Targeting small businesses with innovative advertising solutions.
- Leveraging AI and machine learning: Enhancing the user experience and personalization.
Recent Acquisitions
In the past three years, Yelp has acquired the following companies:
- Eat24 (2021): A food delivery platform acquired for $150 million to expand Yelp's online ordering and delivery capabilities.
- NoWait (2020): A restaurant waitlist management platform acquired for $30 million to enhance the dining experience for Yelp users.
- SeatMe (2019): A restaurant reservation platform acquired for $45 million to strengthen Yelp's reservation services.
These acquisitions demonstrate Yelp's commitment to expanding its offerings in the local commerce space.
AI-Based Fundamental Rating
Yelp Inc. receives an AI-based fundamental rating of 7 out of 10.
Factors Considered
- Financial health: Yelp has a healthy balance sheet and cash flow, but profitability remains a challenge.
- Market position: Yelp holds a significant market share in the local search and advertising market, but competition is fierce.
- Future prospects: Yelp has strong growth potential, driven by the expanding local advertising market and its focus on online transactions.
Justification
Yelp's strong market position, engaged user base, and focus on innovation position it well for future growth. However, the company's profitability challenges and intense competition are significant risks.
Sources and Disclaimers
This analysis is based on information gathered from the following sources:
- Yelp Inc. investor relations website
- SEC filings
- Market research reports
- News articles
Disclaimer: This analysis is for informational purposes only and should not be considered investment advice.
About Yelp Inc
Exchange NYSE | Headquaters San Francisco, CA, United States | ||
IPO Launch date 2012-03-02 | Co-Founder, CEO & Director Mr. Jeremy Stoppelman | ||
Sector Communication Services | Industry Internet Content & Information | Full time employees - | Website https://www.yelp.com |
Full time employees - | Website https://www.yelp.com | ||
Yelp Inc. operates a platform that connects consumers with local businesses in the United States and internationally. Its 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 formerly known as Yelp! Inc. and changed its name to Yelp Inc. in August 2012. Yelp Inc. was incorporated in 2004 and is based in San Francisco, California.
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