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Yelp (YELP)
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Yelp (YELP) AI Stock Analysis

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YELP

Yelp

(NYSE:YELP)

Rating:71Outperform
Price Target:
$39.00
▲(10.61%Upside)
Yelp scores well due to strong financial performance and promising earnings call insights, particularly in service growth and AI innovation. However, neutral technical indicators and macroeconomic uncertainties weigh on the overall score.
Positive Factors
Financial Performance
Yelp produced a solid set of results with healthy growth from Services despite facing tough comparisons.
Strategy and Innovation
The company remains focused on executing its product-led growth strategy with significant consumer-facing updates and innovation around AI.
Negative Factors
Competitive Environment
Declining user engagement and growing competition in the RR&O segment creates a tough operating environment.
Revenue Outlook
Management gave a cautious revenue outlook for the remainder of the year due to macro headwinds.
User Engagement
Ad clicks declined 3% year over year, indicating challenges in maintaining user interaction.

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

Yelp Business Overview & Revenue Model

Company DescriptionYelp Inc. is a prominent online platform headquartered in San Francisco, California, facilitating local business discovery and review. Founded in 2004, the company operates in the internet content and information sector, offering users the ability to access and share reviews, ratings, and other information about local businesses across various categories, including dining, shopping, entertainment, and services. Yelp's platform is accessible via its website and mobile applications, making it a widely-used resource for consumer insights and business information.
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: -1.34%|
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's financial performance is solid with strong revenue growth, high gross profit margins, and improved net profit margin. The company maintains a low debt-to-equity ratio and generates robust free cash flow, although cash reserves have decreased.
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.41B1.34B1.19B1.03B872.93M
Gross Profit1.29B1.22B1.09B953.74M815.75M
EBITDA206.55M149.31M111.63M143.46M15.68M
Net Income132.85M99.17M36.35M39.67M-19.42M
Balance Sheet
Total Assets983.57M1.01B1.02B1.05B1.15B
Cash, Cash Equivalents and Short-Term Investments327.91M446.40M400.62M479.78M595.88M
Total Debt43.15M87.30M126.33M168.22M200.10M
Total Liabilities239.60M265.19M305.60M299.21M300.41M
Stockholders Equity743.97M749.53M710.32M751.32M854.53M
Cash Flow
Free Cash Flow248.47M279.43M160.33M184.37M138.57M
Operating Cash Flow285.81M306.28M192.31M212.66M176.70M
Investing Cash Flow-77.27M-54.68M-126.14M-27.65M248.36M
Financing Cash Flow-303.80M-246.78M-237.53M-300.49M-21.05M

Yelp Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price35.26
Price Trends
50DMA
36.29
Negative
100DMA
35.77
Negative
200DMA
36.59
Negative
Market Momentum
MACD
-0.22
Negative
RSI
52.35
Neutral
STOCH
82.31
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 35.26 is above the 20-day moving average (MA) of 34.64, below the 50-day MA of 36.29, and below the 200-day MA of 36.59, indicating a neutral trend. The MACD of -0.22 indicates Negative momentum. The RSI at 52.35 is Neutral, neither overbought nor oversold. The STOCH value of 82.31 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (58)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$1.57B23.739.18%4.42%26.71%-23.67%
71
Outperform
$2.25B16.9619.74%5.93%29.17%
69
Neutral
$822.98M16.445.05%-16.79%
69
Neutral
$1.12B90.291.35%16.62%
68
Neutral
$3.28B-15.07%-18.11%-516.37%
58
Neutral
kr14.50B4.8719.17%3.62%-8.59%7.48%
54
Neutral
$746.05M
12.01%35.71%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
YELP
Yelp
35.26
-0.95
-2.62%
ANGI
Angi
17.15
-4.85
-22.05%
OPRA
Opera
17.63
6.32
55.88%
IAC
IAC/InteractiveCorp.
41.14
-0.58
-1.39%
TBLA
Taboola.com
3.44
0.16
4.88%
NXDR
Nextdoor Holdings
1.95
-0.90
-31.58%

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: Jul 22, 2025