Yelp Inc (YELP) Q4 Earnings Preview: What To Expect?

Yelp Inc (YELP) Q4 Earnings Preview: What To Expect?
By User:ZyMOS [Public domain], via Wikimedia Commons

Yelp Inc (NYSE:YELP) will be reporting its fiscal fourth quarter and full year 2013 earnings on Wednesday, February 5 after the bell. Analysts polled by Thomson Reuters expect the company to post a loss of 3 cents a share, compared to the loss of 6 cents in the same quarter last year. Yelp’s earnings have missed the Wall Street consensus three times over the past four quarters.

Yelp’s losses narrowing as revenues grow

Analysts expect the San Francisco-based company’s revenues to jump 63.4% YoY from $41.16 million to $67.26 million. Yelp Inc (NYSE:YELP)’s own revenue guidance stands at $66-$67 million, indicating 62% annual growth. For the full year 2013, analysts expect the company to incur a net loss of 15 cents on revenues of $229.64 million. Yelp had suffered a loss of 33 cents per share with $137.57 million in revenues in the same quarter last year.

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RBC Capital Markets analyst Mark S. Mahaney said in a research note that local advertising revenue and the number of unique visitors will be the key focus. Mahaney expects Yelp Inc (NYSE:YELP)’s local advertising revenue to surge 70% during the fourth quarter to $58.2 million. UBS analyst Eric Sheridan says the company stands to benefit from the new mobile app display ads. Sheridan says that will push Yelp’s brand advertising revenue to $7.9 million.

Yelp growing rapidly on the mobile platform

The number of unique monthly visitors holds the key to Yelp Inc (NYSE:YELP)’s future growth. RBC Capital Markets estimates the number of unique monthly visitors to rise 38% in Q4 after a 41% growth in the first quarter. During the third quarter, about 46% of total local ads were served on mobile devices, and more than 62% of searches came through mobile. According to comScore U.S. data, Yelp’s mobile platform witnessed a 59.5% increase in the number of unique visitors, and 57.1% gain in total mobile minutes during the first two months of the fourth quarter.

Yelp Inc (NYSE:YELP) has a market value of $5.14 billion. Shares of the company went up 0.66% to $78.30 in pre-market trading Wednesday. The stock has returned a whopping 280% over the last 12 months.

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