Yelp Inc (YELP) A Buy With Price Target Of $106: Feltl and Company

Yelp Inc (YELP) A Buy With Price Target Of $106: Feltl and Company
By User:ZyMOS [Public domain], via Wikimedia Commons

Yelp Inc (NYSE:YELP) has reported strong financials for the first quarter of 2014. Revenue had been estimated at $75 million, while in reality it has touched the mark of $76.4 million. Better than expected results, it was primarily driven by strong growth in active local business accounts, which gained from 67k to 74k, says a report dated May 1, 2014 from Feltl and Company analyst Randy L. Hugen.

Yelp needs to come up with a new marketing plan

Yelp Inc (NYSE:YELP)’s advertiser growth is trailed by user growth. Mobile user growth came at 52%, while non-mobile user growth slowed a bit at 29%. Of the 52% growth in non-mobile users, only 10% is attributable to Yelp’s mobile app. This indicates that the company’s growth in advertisers may slow down in the long-term. To avoid this, it will become necessary for Yelp to come up with new tactics for marketing to expand the consumer base, believes the analyst.

Q2 2022 Hedge Fund Letters Database Now Live!

Hedge funds HFMQ2 2022 hedge fund letters database is now up. See what stocks top hedge funds are selling, what they are buying, what positions they are hiring for, what their investment process is, their returns and much more! This page is updated frequently, VERY FREQUENTLY, daily, or sometimes multiple times a day. As we get new Read More

For the quarter, the analyst expected an EPS loss of 7 cents, and the consensus was looking for a loss of 6 cents. In reality, the EPS loss was 4 cents due to a benefit from income tax during in the quarter. For 2014, analysts forecast losses per share of 3 cents, and for 2015, earnings per share are expected to be 14 cents.

Alliance with YP helpful

Yelp Inc (NYSE:YELP) recently entered into an agreement with YP, which is currently generating revenue of more than $1 billion on its platform, even though its traffic is less than that of Yelp.  It is expected that this relationship will help Yelp to increase or maintain its revenues in 2015, believes the analyst. Presently guidance from the company does not include the partnership with Yelp.

Revenue has gone up for Q1 by 66%, but growth was lower by 2% than what it was in the first quarter last year, although it was in line with the 2012 growth in revenue of 65%. Yelp Inc (NYSE:YELP) expects FY’14 revenue growth will slow down to the 50s, but since Yelp has been exceeding its guidance consistently, it is expected that once again the actual results may beat expectations and growth could be better than estimated.

For 2014 and 2015, the analyst has raised his revenue estimates by $7 million and $10 million to $365 million and $544 million, respectively.

Feltl and Company analysts have assigned a Buy rating to Yelp Inc (NYSE:YELP) with a price target of $106.

Updated on

Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at
Previous article Twitter Inc (TWTR) User Metrics Will Inflect Up Eventually: RBC
Next article Index Funds With A Weighting Based On Valuation

No posts to display


  1. Whoever wrote this article is now kicking himself in the back! LOL
    Folks help expose the predic(k)tors, whose predic(k)tions have gone wrong!

    Stock market is not a place for astrologers #Epicfail-AmalJain

Comments are closed.