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Yelp (YELP)
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Yelp (YELP) AI Stock Analysis

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YELP

Yelp

(NYSE:YELP)

Rating:70Outperform
Price Target:
$34.00
▲(8.31% Upside)
Yelp's strong financial performance and strategic focus on AI and data licensing are significant strengths. However, bearish technical indicators and challenges in certain revenue segments, along with macroeconomic uncertainties, temper the overall outlook.
Positive Factors
Financial Performance
Q2 total revenues beat expectations and high end of guidance led by Services growth driven by strong Request-a-Quote projects growth and contribution from RepairPal acquisition.
Innovation and Strategy
Positive commentary around key initiatives such as including AI, increasing adoption of Yelp Assistant, and growing contribution from AI API and data licensing partnerships.
Operational Efficiency
Q2 Adjusted EBITDA solidly above expectations and guidance due to topline outperformance and continued operating expense discipline.
Negative Factors
Revenue Outlook
The outlook for 3Q revenue and EBITDA was below expectations, indicating potential challenges for the company.
User Engagement
Yelp is experiencing a decline in user engagement, posing risks to its traffic and monetization model.
Visibility and Competition
Growing AI-generated search results on Google are impacting Yelp's visibility, potentially reducing its ability to attract new users.

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 services sold to local businesses, which can create enhanced business profiles, promote their listings, and access additional marketing tools. Key revenue streams include cost-per-click (CPC) advertising, where businesses pay Yelp each time a user clicks on their ad, and premium services like Yelp Ads, which allow businesses to appear prominently in search results. Additionally, Yelp offers a subscription service called Yelp Waitlist, which helps restaurants manage reservations and customer flow. Significant partnerships with third-party services, such as delivery platforms and payment processors, also contribute to Yelp's earnings by enhancing the value of its offerings to both consumers and businesses.

Yelp Earnings Call Summary

Earnings Call Date:Aug 07, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Neutral
Yelp's earnings call highlights strong financial performance, growth in AI initiatives, and robust service revenue, yet faces challenges with declining RR&O revenue, fewer advertising locations, and macroeconomic uncertainties.
Q2-2025 Updates
Positive Updates
Record Net Revenue and Profitability
Yelp delivered record net revenue of $370 million and strong profitability, expanding net income margin by 1 percentage point and adjusted EBITDA margin by 2 percentage points from the prior year.
Growth in AI Initiatives
Yelp Assistant project submissions increased by more than 400% year-over-year. AI search API calls accelerated, increasing by 20x over the past year and 10x in the last 2 months, contributing to annual run rate revenue related to AI search exceeding $10 million.
Increase in Services Revenue
Services revenue increased by 8% year-over-year to a quarterly record of $241 million, driven by improvements in request flow and AI chatbot enhancements.
Strong Financial Performance
Net income increased by 16% year-over-year to $44 million, or $0.67 per share, and adjusted EBITDA increased by 10% year-over-year to $100 million.
Capital Return to Shareholders
Yelp repurchased $65.9 million worth of shares in the second quarter, with $202 million remaining under the existing repurchase authorization.
Negative Updates
Decline in RR&O Revenue
Restaurants, retail, and other (RR&O) revenue declined by 5% year-over-year to $113 million, primarily due to macroeconomic pressures and competitive headwinds.
Decrease in Advertising Locations
Overall decline of 3% year-over-year in paying advertising locations to 515,000, driven by decreased RR&O locations.
Ad Clicks Decline
Ad clicks declined by 7% year-over-year due to macroeconomic pressures and increased competition in RR&O categories.
Macroeconomic Uncertainties
Heightened macroeconomic uncertainties led to a lack of expected seasonal revenue increase in the second quarter and anticipated flat revenue in the third quarter.
Company Guidance
During the second quarter of 2025, Yelp reported record net revenue of $370 million, marking a 4% year-over-year increase, alongside a 16% rise in net income to $44 million, equating to a 12% margin. Adjusted EBITDA saw a 10% year-over-year increase to $100 million, representing a 27% margin. Services revenue increased by 8% to a quarterly record of $241 million, although RR&O revenue declined by 5% to $113 million. Yelp's Request-a-Quote projects surged by 10%, with project submissions through the AI chatbot Yelp Assistant growing by over 400% year-over-year. The company repurchased $65.9 million worth of shares, maintaining $202 million under its repurchase authorization. Looking forward, Yelp anticipates third-quarter net revenue to remain flat at around $365 million to $370 million, with full-year expectations between $1.465 billion and $1.475 billion. Despite macroeconomic uncertainties affecting advertising budgets, Yelp continues to invest in AI-driven initiatives, such as the AI search API, which experienced a 10x increase in calls over two months, contributing to a $10 million annual run rate in AI search-related revenue.

Yelp Financial Statement Overview

Summary
Yelp exhibits strong financial performance with significant revenue growth, high profitability margins, and a stable balance sheet. The company has effectively managed its debt levels while enhancing its return on equity. Cash flow metrics indicate robust cash generation capabilities.
Income Statement
85
Very Positive
Yelp has demonstrated strong revenue growth with a TTM growth rate of 93%, significantly higher than previous years. The company maintains high gross profit margins above 90%, indicating efficient cost management. Net profit margin has improved to 10.28% TTM, reflecting enhanced profitability. EBIT and EBITDA margins have also shown positive trends, indicating operational efficiency improvements.
Balance Sheet
78
Positive
Yelp's balance sheet is robust with a low debt-to-equity ratio of 0.041 TTM, indicating low leverage and financial stability. The return on equity has improved to 20.17% TTM, showcasing effective use of equity to generate profits. The equity ratio remains strong, reflecting a solid capital structure. However, the total debt has decreased, which is positive for financial health.
Cash Flow
80
Positive
Yelp's cash flow position is strong with a positive free cash flow growth rate of 5.52% TTM. The operating cash flow to net income ratio is healthy at 2.11, indicating efficient cash generation relative to net income. The free cash flow to net income ratio of 0.87 TTM suggests effective conversion of earnings into cash.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.45B1.41B1.34B1.19B1.03B872.93M
Gross Profit1.32B1.29B1.22B1.09B953.74M815.75M
EBITDA257.41M206.55M149.31M163.27M143.46M-11.42M
Net Income149.14M132.85M99.17M36.35M39.67M-19.42M
Balance Sheet
Total Assets980.17M983.57M1.01B1.02B1.05B1.15B
Cash, Cash Equivalents and Short-Term Investments301.12M327.91M446.40M410.62M489.78M606.80M
Total Debt30.58M43.15M87.30M126.33M168.22M200.10M
Total Liabilities233.77M239.60M265.19M305.60M299.21M300.41M
Stockholders Equity746.40M743.97M749.53M710.32M751.32M854.53M
Cash Flow
Free Cash Flow284.97M248.47M279.43M160.33M184.37M138.57M
Operating Cash Flow329.30M285.81M306.28M192.31M212.66M176.70M
Investing Cash Flow-80.84M-77.27M-54.68M-126.14M-27.65M248.36M
Financing Cash Flow-304.97M-303.80M-246.78M-237.53M-300.49M-21.05M

Yelp Technical Analysis

Technical Analysis Sentiment
Negative
Last Price31.39
Price Trends
50DMA
33.50
Negative
100DMA
34.93
Negative
200DMA
36.34
Negative
Market Momentum
MACD
-0.66
Negative
RSI
43.55
Neutral
STOCH
45.13
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 31.39 is below the 20-day moving average (MA) of 31.87, below the 50-day MA of 33.50, and below the 200-day MA of 36.34, indicating a bearish trend. The MACD of -0.66 indicates Negative momentum. The RSI at 43.55 is Neutral, neither overbought nor oversold. The STOCH value of 45.13 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 (60)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$1.45B20.218.57%4.86%29.62%-19.65%
72
Outperform
$785.74M14.795.86%-15.79%
70
Outperform
$1.99B14.3120.13%5.37%13.08%
69
Neutral
$991.04M91.011.40%12.01%
60
Neutral
$44.01B4.13-12.81%4.14%1.86%-42.71%
54
Neutral
$793.88M-14.27%9.65%56.50%
52
Neutral
$2.94B-8.49%-23.79%-138.59%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
YELP
Yelp
31.39
-2.70
-7.92%
ANGI
Angi
17.56
-8.24
-31.94%
OPRA
Opera
16.05
2.36
17.24%
IAC
IAC/InteractiveCorp.
36.58
-6.05
-14.19%
TBLA
Taboola.com
3.34
0.09
2.77%
NXDR
Nextdoor Holdings
2.01
-0.34
-14.47%

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: Aug 14, 2025