Yelp (YELP) AI Stock Analysis

• Market Cap: $1.46B
• Dividend Yield: N/A
• Average Volume (3M): 1.77M
• Price to Earnings (P/E): 13.2
• Beta (1Y): 0.44
• Revenue Growth: 5.35%
• EPS Growth: 33.74%
• Country: US
• Employees: 5,116
• Sector: Communication Services
• Sector Strength: 97
• Industry: Internet Content & Information
• EPS (TTM): 0.61
• Shares Outstanding: 59,517,014
• 10 Day Avg. Volume: 1,451,676
• 30 Day Avg. Volume: 1,766,240
• PEG Ratio: 0.79
• Price to Book (P/B): 2.71
• Price to Sales (P/S): 1.31
• P/FCF Ratio: 5.96
• Enterprise Value/Market Cap: 0.91
• Enterprise Value/Revenue: 0.91
• Enterprise Value/Gross Profit: 1.01
• Enterprise Value/Ebitda: 5.31
• 1Y Price Target: $25.20
• Price Target Upside: 2.61% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 6
• EPS Forecast (FY): 2.07
• Revenue Forecast (FY): $1.47B

• Rating: 71 Outperform
• Price Target: $27.00 ▲(9.93% Upside)
• Action: Upgraded Date: 02/13/26
• Date: Action: Upgraded 02/13/26

Overall score reflects strong underlying financial performance (high margins, robust free cash flow, and a low-debt balance sheet) and a supportive earnings multiple, partially offset by very weak technical momentum and mixed forward outlook as 2026 investment plans pressure near-term EBITDA while legacy ad categories remain under strain.

Positive Factors

High Gross Margin

Sustained gross margins near 90% provide structural operating leverage for Yelp. With low direct costs, incremental revenue largely flows to the bottom line, supporting durable profitability, resilience to ad-cycle volatility, and the ability to fund product investment without heavy capital intensity.

Strong Free Cash Flow

Robust, consistent cash generation gives Yelp financial flexibility to repurchase shares, invest in AI and acquisitions, and absorb cyclical ad revenue downturns. High cash conversion (OCF ~1.95x net income) indicates earnings are backed by cash, reducing refinancing and liquidity risk.

First‑party Data & Licensing

Scale of proprietary local content and data licensing ties Yelp to structural market trends around AI and model training. This diversifies revenue beyond ads, creates high-margin licensing streams, and builds a durable competitive asset that is hard for new entrants to replicate.

Negative Factors

Revenue Decline and Growth Uncertainty

A sizable TTM revenue decline introduces uncertainty about sustaining recent margin gains and FCF levels. If top-line contraction persists, operating leverage can reverse quickly; durable margin expansion depends on stabilizing or reaccelerating revenue trends across core ad categories.

Core Ad Demand Weakness

Declines in paying advertisers and engagement are structural threats to Yelp’s primary monetization channel. Reduced ad footprint and lower click volume limit scalable yield gains, force higher marketing or product investment to recover demand, and heighten revenue cyclicality.

Planned Investment‑Led Margin Compression

Management’s deliberate shift to heavier AI, paid traffic, and integration spending will compress near-term EBITDA. While strategic, these investments raise execution risk: benefits must materialize into sustainable non‑ad revenue to offset margin pressure and justify reduced near‑term profitability.

Yelp Business Overview & Revenue Model

Company Description

Yelp Inc. operates a platform that connects consumers with local businesses in the United States and internationally. The company's platform covers various local business 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 search advertising and multi-location Ad products, as well as enables businesses to deliver targeted search advertising to local audiences; and business listing page products. The company also offers other services comprising Yelp Reservations that provide online reservations for restaurants, nightlife, and other venues directly from their Yelp business pages; Yelp Waitlist, a subscription-based waitlist management solution that allows consumers to check wait times and join waitlists remotely, as well as businesses to manage seating and server rotation; 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 and paid access to content and data for consumer-facing enterprise use through publicly available APIs. 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, as well as non-advertising partner arrangements. It has strategic partnership with Grubhub for providing consumers with a service to place food orders for pickup and delivery. Yelp Inc. was incorporated in 2004 and is headquartered in San Francisco, California.

How the Company Makes Money

Yelp primarily makes money by selling advertising and other paid marketing services to local businesses that want increased visibility and customer leads on Yelp’s platform. The largest revenue stream is performance-based and/or impression-based advertising sold to businesses (often through self-serve and sales-assisted channels) that can promote their placement in search results and on business listing pages. Yelp also earns revenue from transaction- or lead-related products that help convert consumer intent into business leads (for example, charges tied to consumer actions such as calls, messages, or quote requests where these products are offered), and from subscription or listing-related services that provide enhanced business profile features (e.g., upgrades, tools, or added capabilities for business owners). In addition, Yelp can generate revenue through partnerships and other services that extend its reach or monetize intent (such as integrations that facilitate reservations, delivery, or other third-party services), but specific partner names, contractual terms, or the materiality of any single partnership are not provided here; null.

Yelp Financial Statement Overview

Summary

Strong financial quality overall: high and improving profitability (TTM net margin ~10.2%, operating margin ~13.6%) supported by very high gross margin (~90%+), robust free cash flow (~$324M TTM) and strong cash conversion (~1.95x net income), plus a conservatively levered balance sheet (debt-to-equity ~0.04) and strong ROE (~20.3%). Main drag is the TTM revenue decline (-13.4%), which raises uncertainty around the durability of margin gains.

Income Statement

Profitability has strengthened meaningfully versus earlier years: TTM (Trailing-Twelve-Months) net margin is ~10.2% (up from ~9.4% in 2024 and ~7.4% in 2023), with higher operating profitability as well (TTM operating margin ~13.6%). Gross margin remains exceptionally high and stable (~90%+), supporting strong earnings leverage. The key weakness is growth: after several years of solid revenue expansion (2021–2023), TTM revenue declined (-13.4%), which introduces higher uncertainty around durability of the recent margin gains.

Balance Sheet

The balance sheet is conservatively positioned with very low leverage: TTM debt-to-equity is ~0.04 (down from ~0.06 in 2024 and ~0.12 in 2023), indicating substantial financial flexibility. Equity is sizable (~$711M TTM) against total assets (~$958M TTM). Returns on shareholder capital are strong (TTM return on equity ~20.3%), improving steadily from prior years. Main watch-outs are that asset and equity balances have trended modestly lower versus 2023–2024, which could reflect capital returns or other balance sheet changes, but leverage remains a clear strength.

Cash Flow

Cash generation is robust and improving: TTM operating cash flow is ~$372M and free cash flow is ~$324M, both higher than 2024. Cash conversion is strong, with operating cash flow running at ~1.95x net income, indicating earnings are backed by cash. Free cash flow is solid relative to profits (TTM free cash flow is ~87% of net income). The primary weakness is volatility in free cash flow growth year-to-year (down in 2024, sharply higher TTM), which may signal variability in working capital or investment timing.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.46B	1.41B	1.34B	1.19B	1.03B
Gross Profit	1.32B	1.29B	1.22B	1.09B	953.74M
EBITDA	264.52M	206.55M	149.31M	163.27M	126.57M
Net Income	145.60M	132.85M	99.17M	36.35M	39.67M
Balance Sheet
Total Assets	958.48M	983.57M	1.01B	1.02B	1.05B
Cash, Cash Equivalents and Short-Term Investments	319.35M	327.91M	446.40M	410.62M	489.78M
Total Debt	42.33M	43.15M	87.30M	126.33M	168.22M
Total Liabilities	247.63M	239.60M	265.19M	305.60M	299.21M
Stockholders Equity	710.85M	743.97M	749.53M	710.32M	751.32M
Cash Flow
Free Cash Flow	323.02M	248.47M	279.43M	160.33M	184.37M
Operating Cash Flow	371.37M	285.81M	306.28M	192.31M	212.66M
Investing Cash Flow	-45.65M	-77.27M	-54.68M	-126.14M	-27.65M
Financing Cash Flow	-329.39M	-303.80M	-246.78M	-237.53M	-300.49M

Yelp Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 24.56
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 24.56 is above the 20-day moving average (MA) of 23.31, below the 50-day MA of 25.03, and below the 200-day MA of 30.41, indicating a neutral trend. The MACD of 0.04 indicates Negative momentum. The RSI at 54.97 is Neutral, neither overbought nor oversold. The STOCH value of 60.27 is Neutral, 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
EVER	74 Outperform	$552.70M	9.83	54.21%	―	57.83%	293.63%
YELP	71 Outperform	$1.46B	13.22	19.96%	―	5.35%	33.74%
TBLA	61 Neutral	$860.56M	33.98	4.51%	―	10.96%	―
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
ANGI	59 Neutral	$303.19M	13.76	4.41%	―	-13.14%	17.25%
IAC	51 Neutral	$2.89B	-29.16	-2.17%	―	-29.40%	-529.81%
NXDR	51 Neutral	$554.45M	-14.97	-12.56%	―	6.65%	50.32%

Yelp Corporate Events

Yelp Completes $270 Million Acquisition of Hatchify

On January 17, 2026, Yelp Inc. agreed to acquire Hatchify Inc. through a merger of its wholly owned subsidiary Hargrove Merger Sub, Inc. with Hatchify, and on February 2, 2026, the merger closed, making Hatchify a wholly owned subsidiary of Yelp. The deal valued Hatchify’s equity and options at approximately $270 million in cash, subject to standard post‑closing adjustments, with an additional $30 million in retention packages to be paid over two to three years to certain continuing Hatchify employees, and Yelp partially financed the transaction with borrowings under its existing revolving credit facility led by JPMorgan Chase and Wells Fargo, signaling a significant capital investment to expand its capabilities and integrate Hatchify’s operations into its broader business.

The most recent analyst rating on (YELP) stock is a Buy with a $31.00 price target. To see the full list of analyst forecasts on Yelp stock, see the YELP Stock Forecast page.