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Yelp (YELP)
NYSE:YELP
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Yelp
(NYSE:YELP)
79Outperform
Positive Factors
Financial Performance
4Q revenue and EBITDA exceeded expectations, primarily driven by the RR&O segment.
Strategic Acquisitions
Yelp announced an $80 million cash acquisition of RepairPal, which is expected to complement Yelp's current request-a-quote offerings and the broader services segment.
Negative Factors
Competitive Pressure
Yelp web traffic could face new headwinds as Google and new Gen-AI search platforms gain traction, impacting lead generation.
Market Challenges
Management noted growth in the RR&O segment is expected to remain pressured given macro challenges.
Yelp (YELP) vs. S&P 500 (SPY)
Market Cap
$2.32B
Dividend YieldN/A
Average Volume (3M)924.02K
Price to Earnings (P/E)18.6
Beta (1Y)0.74
Revenue Growth5.61%
EPS Growth37.61%
CountryUS
Employees5,116
SectorCommunication Services
Sector Strength74
IndustryInternet Content & Information
Share Statistics
EPS (TTM)1.91
Shares Outstanding65,033,180
10 Day Avg. Volume978,342
30 Day Avg. Volume924,019
Financial Highlights & Ratios
PEG Ratio0.50
Price to Book (P/B)N/A
Price to Sales (P/S)1.65
Price to Cash Flow (P/CF)8.20
P/FCF Ratio8.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$40.40Price Target Upside13.29% Upside
Rating ConsensusHold
Number of Analyst Covering6
Yelp Business Overview & Revenue Model
Company DescriptionYelp Inc. is an American company that operates a social networking site and app focused on user reviews and recommendations for local businesses. Founded in 2004 and headquartered in San Francisco, California, Yelp connects consumers with great local businesses across various sectors, including dining, shopping, entertainment, health, and home services. The platform allows users to read and write reviews, upload photos, and share experiences about businesses, helping others make informed decisions.
How the Company Makes MoneyYelp generates revenue primarily through advertising services. The company offers various advertising solutions to businesses, allowing them to promote their products and services to Yelp's extensive user base. Key revenue streams include cost-per-click advertising, which charges businesses based on the number of clicks their ads receive; display advertising, where businesses pay for banner ads on the platform; and enhanced profiles, which allow businesses to highlight specific features like special offers or contact information. Additionally, Yelp earns revenue from transactions and subscriptions, including services like Yelp Reservations and Waitlist, which help restaurants manage bookings and customer flow. Strategic partnerships, such as those with search engines and other online platforms, also contribute to Yelp's earnings by increasing visibility and driving traffic to its site.
Yelp Financial Statement Overview
Summary
Yelp demonstrates strong financial health with consistent revenue growth and improved profitability. The company maintains a stable balance sheet with low leverage and robust cash flow generation, although operational expenses impact EBIT margins.Income Statement
Yelp shows impressive financial performance with consistent revenue growth, achieving a TTM revenue of $1.41 billion up from $1.34 billion the previous year. The gross profit margin is strong at 89.8%, and the net profit margin improved to 9.4% in TTM. EBITDA margin also increased to 14.9%, reflecting efficient cost management. However, EBIT margin at 10.8% is moderate due to operational expenses.85
Very Positive
Balance Sheet
Yelp maintains a solid balance sheet with a low debt-to-equity ratio of 0.06 in TTM, indicating prudent leverage levels. The equity ratio is robust at 75.6%, suggesting financial stability. ROE improved to 17.9%, showcasing effective use of equity to generate profits. However, total assets have slightly decreased over time, which could limit future growth opportunities.75
Positive
Cash Flow
Yelp's cash flow is strong, with a TTM operating cash flow to net income ratio of 2.15, indicating healthy cash generation relative to profit. Free cash flow to net income ratio stands at 1.87, reinforcing solid cash management. Despite a slight decline in free cash flow compared to the previous year, the company maintains a stable cash position with significant cash reserves.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.41B | 1.34B | 1.19B | 1.03B | 872.93M | Gross Profit |
| 1.29B | 1.22B | 1.09B | 953.74M | 815.75M | EBIT |
| 151.04M | 79.04M | 58.35M | 31.51M | -31.07M | EBITDA |
| 206.55M | 149.31M | 111.63M | 143.46M | 15.68M | Net Income Common Stockholders |
| 132.85M | 99.17M | 36.35M | 39.67M | -19.42M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 317.91M | 446.40M | 400.62M | 479.78M | 595.88M | Total Assets |
| 983.57M | 1.01B | 1.02B | 1.05B | 1.15B | Total Debt |
| 43.15M | 87.30M | 126.33M | 168.22M | 200.10M | Net Debt |
| -174.18M | -226.61M | -180.04M | -311.57M | -395.78M | Total Liabilities |
| 239.60M | 265.19M | 305.60M | 299.21M | 300.41M | Stockholders Equity |
| 743.97M | 749.53M | 710.32M | 751.32M | 854.53M |
| Cash Flow | Free Cash Flow | |||
| 248.47M | 279.43M | 160.33M | 184.37M | 138.57M | Operating Cash Flow |
| 285.81M | 306.28M | 192.31M | 212.66M | 176.70M | Investing Cash Flow |
| -77.27M | -54.68M | -126.14M | -27.65M | 248.36M | Financing Cash Flow |
| -303.80M | -246.78M | -237.53M | -300.49M | -21.05M |
Yelp Technical Analysis
Negative
35.66
Price Trends
36.97
Negative
37.75
Negative
36.33
Negative
Market Momentum
0.36
Negative
61.38
Neutral
66.62
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For YELP, the sentiment is Negative. The current price of 35.66 is below the 20-day moving average (MA) of 36.17, below the 50-day MA of 36.97, and below the 200-day MA of 36.33, indicating a bearish trend. The MACD of 0.36 indicates Negative momentum. The RSI at 61.38 is Neutral, neither overbought nor oversold. The STOCH value of 66.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for YELP.
Yelp Risk Analysis
Yelp disclosed 37 risk factors in its most recent earnings report. Yelp reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Yelp Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $2.32B | 18.64 | 17.79% | ― | 5.61% | 37.61% | |
64 Neutral | $16.07B | ― | -2.39% | ― | 14.96% | 29.56% | |
61 Neutral | $1.64B | 708.48 | 0.55% | ― | 2.63% | -58.77% | |
60 Neutral | $1.12B | 17.14 | 3.42% | ― | -17.69% | ― | |
58 Neutral | $25.04B | 3.12 | -9.31% | 4.26% | 2.35% | -43.03% | |
52 Neutral | $676.39M | 35.54 | -9999.00% | ― | -4.34% | 20.50% | |
44 Neutral | $714.84M | ― | -46.67% | ― | -25.81% | -34.43% |
* Communication Services Sector Average
Performance Comparison
YELP
Yelp
35.66
-5.26
-12.85%
ANGI
Angi
12.20
-10.80
-46.96%
GRPN
Groupon
16.99
5.85
52.51%
TRIP
TripAdvisor
11.69
-15.36
-56.78%
OPEN
Opendoor Technologies
0.99
-1.70
-63.20%
Z
Zillow Group Class C
66.54
18.84
39.50%
Yelp Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -12.06% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
Yelp's 2024 performance was marked by strong revenue growth and profitability driven by the services segment, AI innovations, and strategic acquisitions. However, the decline in RRNO revenue and challenges in paid search initiatives were notable setbacks. Overall, the positive aspects of record revenue, profitability, and successful AI integration outweigh the challenges.Highlights
Record Net Revenue and Profitability
Yelp Inc. delivered record net revenue of $1.41 billion in 2024, a 6% increase year over year, and net income grew by 34% to $133 million.
Strong Performance in Services
Services revenue increased by 11% year over year to $879 million, with home services showing a standout annual growth of approximately 15%.
AI Innovations and Enhancements
Yelp introduced more than 80 new features, including the successful launch of Yelp Assistant, which increased project submissions by more than 50% from Q3 to Q4.
Increase in Consumer Engagement
Request a Quote consumer projects increased by approximately 25% year over year, with a 30% increase in Q4, and Yelp users contributed 21 million new reviews in 2024.
Successful Capital Allocation
Yelp repurchased $251 million worth of shares and completed the acquisition of RepairPal for approximately $80 million, enhancing their auto services category.
Lowlights
Decline in RRNO Revenue
Restaurants, retail, and other categories faced a challenging environment, leading to a 3% year-over-year decline in RRNO revenue to $470 million.
Decrease in Paying Advertising Locations
A decrease in RRNO locations resulted in a 4% year-over-year decline in paying advertising locations to 521,000.
Limitations in Paid Search Initiatives
Yelp reduced spending on acquiring services projects off Yelp through paid search as it did not provide the desired return.
Company Guidance
During the call, Yelp Inc. reported strong financial results for 2024, with net revenue increasing by 6% year over year to $1.41 billion, and net income growing by 34% year over year to $133 million. The company achieved its fifteenth consecutive quarter of double-digit revenue growth in services categories, recording a revenue increase of 11% year over year to $879 million. Notably, the home services category posted a 15% year-over-year growth. Adjusted EBITDA grew by 8% to $358 million, and the company expanded its net income margin by two percentage points. Yelp highlighted successful product innovations, including the Yelp Assistant AI chatbot, which increased project submissions by over 50% from the third to fourth quarter. Despite reduced spending on paid search, consumer projects through Request a Quote increased by 25% year over year. Looking ahead, Yelp plans to focus on services, enhance advertiser value, and transform the consumer experience, leveraging AI to drive growth and operational efficiency. For 2025, Yelp projects net revenue between $1.470 billion and $1.485 billion, with first-quarter adjusted EBITDA expected to be in the range of $65 million to $70 million.Yelp Corporate Events
Executive/Board ChangesShareholder Meetings
Yelp Board Member Chris Terrill to Step Down
Neutral
Mar 27, 2025
On March 25, 2025, Chris Terrill announced his decision not to seek reelection to Yelp Inc.’s board of directors at the upcoming annual meeting. His decision is not due to any disagreements with Yelp’s operations or policies, and he will remain in his current roles until the election of new directors.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.