Yelp (YELP) AI Stock Analysis

• Market Cap: $1.38B
• Dividend Yield: N/A
• Average Volume (3M): 1.69M
• Price to Earnings (P/E): 13.2
• Beta (1Y): 0.52
• 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: 1,960,566
• 30 Day Avg. Volume: 1,690,063
• 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: 0.98
• Enterprise Value/Revenue: 0.93
• Enterprise Value/Gross Profit: 1.03
• Enterprise Value/Ebitda: 5.39
• 1Y Price Target: $26.33
• Price Target Upside: 10.92% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7
• EPS Forecast (FY): 2.07
• Revenue Forecast (FY): $1.47B

• Rating: 71 Outperform
• Price Target: $26.00 ▲(9.52% 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

Strong cash generation & low leverage

Yelp's persistent high free cash flow and strong cash conversion (~1.95x net income) combined with very low leverage provide durable financial flexibility. This supports continued share repurchases, opportunistic M&A and funding AI investments without materially increasing solvency risk over the next 2–6 months.

AI product momentum & strategic partnerships

Investment in AI-powered offerings (Yelp Assistant, Yelp Host) and prominent partnerships represent a structural shift from legacy ads toward higher-value services. These capabilities can sustainably diversify revenue, increase customer stickiness, and support higher per-location monetization over multiple quarters.

Large first-party content base & data licensing

Yelp's extensive proprietary local content is a durable competitive asset enabling repeatable licensing and data revenue streams. First-party content reduces reliance on third parties, underpins differentiated products, and supports scalable SaaS/data monetization that can sustain growth beyond advertising cycles.

Negative Factors

Recent revenue decline and category pressure

A material TTM revenue decline and significant RR&O softness indicate demand weakness in core ad categories. This raises uncertainty about sustaining recent margin gains, as fixed-cost leverage may reverse and revenue recovery timelines could extend beyond a few quarters absent durable ad demand improvement.

Weaker ad engagement and paying locations

Falling ad engagement and a shrinking base of paying locations are structural threats to Yelp's core advertising model. Lower click volume and fewer advertisers reduce scalability of ad revenue and increase dependency on higher CPCs or alternative revenue streams to replace lost legacy ad demand.

Planned investments to compress near-term EBITDA

Management's deliberate ramp of AI, paid traffic and Hatch integration will pressure EBITDA in 2026 versus 2025. While strategic, these investments raise near-term execution and returns risk and could limit free-cash-flow growth and capital-return optionality if expected gains take multiple quarters to materialize.

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 generates revenue primarily through its advertising services, which include pay-per-click (PPC) advertising, where businesses pay to have their ads displayed prominently in search results and on business pages. Additionally, Yelp offers enhanced business profiles, which provide businesses with features like the ability to add photos, videos, and special offers for a subscription fee. Another significant revenue stream comes from Yelp's reservations and food delivery services, where it partners with companies to facilitate bookings and deliveries for restaurants. Yelp also generates income through its 'Yelp Deals' and 'Gift Certificates' programs, allowing businesses to offer discounts and gift certificates to attract customers. Strategic partnerships and collaborations with other firms in the hospitality and service sectors further contribute to its revenue, as they expand Yelp's reach and enhance its service offerings.

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: 23.74
• 50DMA: Negative
• 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 23.74 is above the 20-day moving average (MA) of 22.42, below the 50-day MA of 26.53, and below the 200-day MA of 31.25, indicating a neutral trend. The MACD of -1.12 indicates Negative momentum. The RSI at 50.29 is Neutral, neither overbought nor oversold. The STOCH value of 96.11 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
EVER	74 Outperform	$588.96M	9.83	53.19%	―	57.83%	293.63%
YELP	71 Outperform	$1.38B	13.22	20.02%	―	5.35%	33.74%
TBLA	61 Neutral	$873.32M	33.98	4.32%	―	10.96%	―
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
ANGI	60 Neutral	$330.86M	13.76	4.40%	―	-13.14%	17.25%
IAC	51 Neutral	$2.94B	-29.16	-2.31%	―	-29.40%	-529.81%
NXDR	51 Neutral	$639.75M	-14.97	-12.25%	―	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.

Yelp Expands Revolving Credit Facility and Liquidity Capacity

On December 18, 2025, Yelp Inc. amended its existing revolving credit and guaranty agreement, increasing its total borrowing capacity to $325 million and raising the letter of credit sub-limit to $35 million, while appointing Wells Fargo Bank, National Association as the new administrative and collateral agent in place of JPMorgan Chase Bank, N.A. As of that date, Yelp had no outstanding loans and $4.2 million in letters of credit under the facility, and the amendment left interest terms, fees, covenants and default provisions materially unchanged, signaling an expanded but conservatively structured liquidity backstop for the company without altering its risk profile for lenders and other stakeholders.

The most recent analyst rating on (YELP) stock is a Buy with a $38.00 price target. To see the full list of analyst forecasts on Yelp stock, see the YELP Stock Forecast page.