Yelp (YELP) AI Stock Analysis

• Market Cap: $2.30B
• Dividend Yield: N/A
• Average Volume (3M): 904.95K
• Price to Earnings (P/E): 18.5
• Beta (1Y): 0.68
• Revenue Growth: 5.61%
• EPS Growth: 37.61%
• Country: US
• Employees: 5,116
• Sector: Communication Services
• Sector Strength: 85
• Industry: Internet Content & Information
• EPS (TTM): 1.91
• Shares Outstanding: 65,033,180
• 10 Day Avg. Volume: 637,048
• 30 Day Avg. Volume: 904,949
• PEG Ratio: 0.49
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.65
• Price to Cash Flow (P/CF): 8.20
• P/FCF Ratio: 8.20
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 1.82
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $36.83
• Price Target Upside: 3.95% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7

Yelp's overall stock score reflects its robust financial performance, highlighted by consistent revenue growth and profitability. The earnings call provided positive insight into future growth, driven by AI innovations and strategic focus. However, technical analysis indicates bearish momentum, which tempers the overall score. Valuation is fair, though the absence of a dividend yield may limit appeal to some investors.

Positive Factors

Financial Performance

4Q revenue and EBITDA exceeded expectations, primarily driven by the RR&O segment.

Operational Efficiency

Adjusted EBITDA was well above consensus, due in part to expense discipline, lower average headcount, and a shift towards capitalizing R&D.

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 Environment

Yelp web traffic could face new headwinds as Google and new Gen-AI search platforms gain traction, impacting lead generation.

Macro Challenges

Management noted growth in the RR&O segment is expected to remain pressured given macro challenges.

Market Expectations

Investor focus may turn to the lower Q4 revenue guide, which is below consensus estimates.

Yelp Business Overview & Revenue Model

Company Description

Yelp 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 Money

Yelp 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.

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.

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.

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

• Technical Analysis Sentiment: Neutral
• Last Price: 35.43
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For YELP, the sentiment is Neutral. The current price of 35.43 is above the 20-day moving average (MA) of 34.97, above the 50-day MA of 35.40, and below the 200-day MA of 36.18, indicating a neutral trend. The MACD of -0.48 indicates Negative momentum. The RSI at 52.51 is Neutral, neither overbought nor oversold. The STOCH value of 89.21 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for YELP.

Yelp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
YELP	74 Outperform	$2.30B	18.52	17.79%	―	5.61%	37.61%
OPRA	74 Outperform	$1.37B	17.07	8.64%	5.02%	20.42%	-36.54%
TBLA	60 Neutral	$1.01B	―	-0.36%	―	22.68%	95.70%
ANGI	59 Neutral	$617.88M	17.31	3.42%	―	-17.69%	―
Sector *	59 Neutral	$13.69B	6.83	-3.38%	3.82%	2.32%	-34.61%
IAC	55 Neutral	$2.85B	―	-9.29%	―	-12.78%	-343.35%
KIND	46 Neutral	$579.45M	―	-19.38%	―	13.27%	34.93%

Yelp Corporate Events

Yelp Board Member Chris Terrill to Step Down

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.