Yelp is set to release its first quarter earnings report in just a few hours, and analysts are anxious to hear from new Chief Financial Officer Lanny Baker. Wall Street projects $155.6 million in revenue, 18 cents per share in losses, and $11.3 million in adjusted EBITDA. Management guided for $154 million to $157 million in revenue and $10 million to $12 million in adjusted EBITDA.

Yelp Inc Earnings Preview

Local ad revenue growth to remain strong

Cantor Fitzgerald analyst Youssef Squali and team have a Buy rating and $38 per share price target on Yelp. They note that the company’s local ad revenue has been showing strong growth even though it has been decelerating. They add that Yelp has been battling rising competition and slowing year over year growth but also that the company’s local ad revenue has been growing faster than overall online advertising despite its deceleration.

Their checks suggest that both traffic and engagement remained strong during the first quarter, and they continue to see a “substantial” opportunity in local online advertising, particularly as the number of competitors that have, scale, brand and network effect remains limited. They project $134 million in local ad revenue, which would represent a 35.9% year over year growth rate. They’re modeling 117,000 active local businesses at the end of the quarter, which would be a 30% increase from last year compared to the previous quarter’s 32% increase, although they expect average revenue per local business to increase 2% to about $1,174.

Yelp’s user metrics remain solid

The Cantor Fitzgerald team note that data from comScore showed that multi-platform unique visits for Yelp decelerated a bit but were still healthy at a 10.6% growth rate year over year, compared to the previous quarter’s 12.3% increase. Total minutes grew 5.7%, compared to the previous quarter’s 7% increase.

They note also that mobile usage and monetization are the key to Yelp’s ability to grow as in the fourth quarter, unique devices using Yelp increased 38% to 20 million. Mobile web uniques increased 14% to 66 million. Squali and team notes that mobile users tend to be the most active and engaged as they view 10 times as many pages as website users. Although the company doesn’t break out mobile revenues because its ad sales are platform-agnostic, the analysts believe mobile will be a major contributor to the company’s growth in the first quarter.

Yelp shares edged 0.55% higher to $21.76 during regular trading hours today.