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Yelp Inc (YELP)
:YELP

Yelp (YELP) AI Stock Analysis

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Yelp

(NYSE:YELP)

Rating:71Outperform
Price Target:
$40.00
▲(14.16%Upside)
Yelp's stock score is driven by strong financial performance and positive earnings call insights, offset by mixed technical indicators and macroeconomic challenges. The fair valuation and lack of a dividend yield further influence the overall assessment.
Positive Factors
Earnings
Yelp produced a solid set of results with healthy growth from Services despite facing tough comparisons.
Financial Performance
4Q revenue and EBITDA exceeded expectations, primarily driven by the RR&O segment.
Strategy
The company remains focused on executing its product-led growth strategy with significant consumer-facing updates and innovation around AI.
Negative Factors
Competitive Dynamics
Yelp web traffic could face new headwinds as Google and new Gen-AI search platforms gain traction, impacting lead generation.
Revenue Outlook
Management gave a cautious revenue outlook for the remainder of the year due to macro headwinds.
User Engagement
Declining user engagement and growing competition in the RR&O segment creates a tough operating environment.

Yelp (YELP) vs. SPDR S&P 500 ETF (SPY)

Yelp Business Overview & Revenue Model

Company DescriptionYelp 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 MoneyYelp generates revenue primarily through advertising and related services. The company's core revenue stream is derived from local advertising, where businesses pay Yelp to enhance their visibility on the platform. This includes features like sponsored listings, enhanced profiles, and targeted advertisements that appear in search results and on business pages. Additionally, Yelp offers performance-based advertising, where businesses are charged based on user interactions with their ads. Another significant revenue stream for Yelp is its subscription services for businesses, which provide tools and insights for managing online presence and customer engagement. Yelp also partners with third-party providers, such as Grubhub, to offer transaction-based services, further contributing to its revenue.

Yelp Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q1-2025)
|
% Change Since: -1.96%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
Yelp's earnings call highlighted strong revenue growth and profitability, driven by their services business and AI innovations. However, challenges in the RR&O categories and macroeconomic uncertainties were noted. While the highlights show a positive trend, the concerns about macroeconomic conditions and specific category declines balance the sentiment.
Q1-2025 Updates
Positive Updates
Revenue Growth and Profitability
Yelp delivered 8% year-over-year revenue growth, achieving $359 million in net revenue. Net income margin expanded by three percentage points and adjusted EBITDA margin by four percentage points from the prior year period. Adjusted EBITDA increased by 32% year-over-year to $85 million, representing a 24% margin.
Services Business Performance
Yelp's Services revenue increased by 14% year-over-year, marking the 16th consecutive quarter of double-digit growth. Request to Quote projects increased by more than 15% year-over-year, excluding projects acquired through paid search.
AI and Product Innovations
Introduction of 15 new features and updates, including AI-powered photo recognition in Yelp Assistant and response quality badges. Upcoming AI-powered call answering services for service pros and restaurants were also announced.
Stock Repurchase Program
Yelp repurchased $62.5 million worth of shares at an average purchase price of $37.01 per share. As of March 31, 2025, $268 million remains under the existing repurchase authorization.
Negative Updates
Decline in RR&O Revenue
Revenue from the Restaurant, Retail, and Other (RR&O) categories declined by 3% year-over-year to $110 million. This decline was attributed to macroeconomic pressures.
Ad Clicks and Paying Locations Decline
Ad clicks declined by 3% year-over-year due to macro pressures in RR&O categories. Overall paying advertising locations declined by 3% year-over-year to 517,000.
Macro Uncertainties Impacting Outlook
Despite strong Q1 performance, increased macroeconomic uncertainties are causing Yelp to widen its revenue and adjusted EBITDA outlook ranges for the full year.
Company Guidance
During Yelp's first quarter 2025 earnings call, the company provided several key metrics highlighting its financial performance and strategic initiatives. Yelp reported an 8% year-over-year increase in net revenue, reaching $359 million, with adjusted EBITDA rising by 32% to $85 million, indicating a 24% margin. The services segment was a strong growth driver, with a 14% year-over-year revenue increase to $232 million, marking the 16th consecutive quarter of double-digit growth in this area. The company also noted a 10% year-over-year increase in Request to Quote projects, primarily due to enhancements in the Request to Quote flow and the adoption of Yelp Assistant. Yahoo's net income reached $24 million, a 72% increase from the previous year, translating to $0.36 per diluted share. Looking forward, Yelp adjusted its full-year net revenue outlook to between $1.465 billion and $1.485 billion, and the adjusted EBITDA forecast to a range of $345 million to $365 million, reflecting both strong first-quarter performance and ongoing macroeconomic uncertainties.

Yelp Financial Statement Overview

Summary
Yelp demonstrates strong financial health with significant revenue and profit growth, efficient operations, and robust cash flow generation. The financial stability is supported by a high gross profit margin and low debt-to-equity ratio, although there is a slight concern over decreasing cash reserves.
Income Statement
85
Very Positive
Yelp shows strong revenue growth with a TTM (Trailing-Twelve-Months) revenue increase of 9.47% from 2023 to 2024. The gross profit margin remains high at 90.25%, indicating effective cost management. Net profit margin improved to 9.95% TTM, demonstrating enhanced profitability. EBIT and EBITDA margins are also solid at 11.81% and 15.98% respectively, reflecting operational efficiency.
Balance Sheet
75
Positive
The company's debt-to-equity ratio is low at 0.05, indicating conservative leverage use. Return on Equity (ROE) is satisfactory at 19.65%, showing good returns on shareholder investments. The equity ratio is robust at 73.90%, highlighting financial stability and strong equity base. However, cash reserves have decreased, warranting careful cash flow management.
Cash Flow
80
Positive
Yelp exhibits a robust free cash flow growth rate of 8.69% TTM, demonstrating effective cash management. The operating cash flow to net income ratio is strong at 2.17, indicating efficient conversion of income to cash. The free cash flow to net income ratio stands at 1.89, highlighting ample cash generation relative to net income.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue955.64M1.41B1.34B1.19B1.03B872.93M
Gross Profit898.24M1.29B1.22B1.09B953.74M815.75M
EBITDA71.50M206.55M149.31M111.63M143.46M15.68M
Net Income59.00M132.85M99.17M36.35M39.67M-19.42M
Balance Sheet
Total Assets985.20M983.57M1.01B1.02B1.05B1.15B
Cash, Cash Equivalents and Short-Term Investments324.41M327.91M446.40M400.62M479.78M595.88M
Total Debt33.51M43.15M87.30M126.33M168.22M200.10M
Total Liabilities257.19M239.60M265.19M305.60M299.21M300.41M
Stockholders Equity728.02M743.97M749.53M710.32M751.32M854.53M
Cash Flow
Free Cash Flow124.58M248.47M279.43M160.33M184.37M138.57M
Operating Cash Flow162.92M285.81M306.28M192.31M212.66M176.70M
Investing Cash Flow24.28M-77.27M-54.68M-126.14M-27.65M248.36M
Financing Cash Flow-281.25M-303.80M-246.78M-237.53M-300.49M-21.05M

Yelp Technical Analysis

Technical Analysis Sentiment
Negative
Last Price35.04
Price Trends
50DMA
36.47
Negative
100DMA
36.14
Negative
200DMA
36.57
Negative
Market Momentum
MACD
-0.68
Negative
RSI
44.71
Neutral
STOCH
59.60
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 35.04 is below the 20-day moving average (MA) of 35.43, below the 50-day MA of 36.47, and below the 200-day MA of 36.57, indicating a bearish trend. The MACD of -0.68 indicates Negative momentum. The RSI at 44.71 is Neutral, neither overbought nor oversold. The STOCH value of 59.60 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 1 risk factors in its most recent earnings report. Yelp reported the most risks in the "Legal & Regulatory" 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 (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
$1.82B27.589.18%3.84%26.71%-23.67%
74
Outperform
$1.20B95.281.35%16.62%
71
Outperform
$2.25B16.8519.74%5.93%29.17%
69
Neutral
$772.59M15.435.05%-16.79%
61
Neutral
$41.07B-0.81-14.21%3.83%2.45%-73.69%
IAIAC
60
Neutral
$3.10B-15.07%-18.11%-516.37%
51
Neutral
$604.49M-18.77%12.01%35.71%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
YELP
Yelp
35.04
-1.43
-3.92%
ANGI
Angi
16.36
-1.94
-10.60%
OPRA
Opera
20.08
7.43
58.74%
IAC
IAC/InteractiveCorp.
39.38
1.14
2.98%
TBLA
Taboola.com
3.63
0.29
8.68%
KIND
Nextdoor Holdings
1.59
-0.98
-38.13%

Yelp Corporate Events

Shareholder Meetings
Yelp Holds 2025 Annual Stockholders Meeting
Neutral
Jun 17, 2025

On June 13, 2025, Yelp Inc. held its 2025 Annual Meeting of Stockholders via a live audio webcast, where stockholders voted on four proposals. All eight director nominees were elected, Deloitte & Touche LLP was ratified as the independent auditor, executive compensation was approved, and it was decided that advisory votes on executive compensation would occur annually.

The most recent analyst rating on (YELP) stock is a Buy with a $48.00 price target. To see the full list of analyst forecasts on Yelp stock, see the YELP Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jun 12, 2025