Dropping out of Harvard Business School and disregarding advice
from Elon Musk were just two decisions along the path to success
for 35-year-old Jeremy Stoppelman, the founder and CEO of
of the ambitious, J. Crew-loving foodie also notes how Stoppelman
has turned down buyout offers -- the most recent of which was for a
cool $1 billion.
"Despite a robust user base, an international footprint, and an
aggressive push into advertising sales," the article notes,
"Yelp... has yet to turn a profit." Stoppelman is not looking for a
"quicker path" to improve Yelp's bottom line, though, and is
decidedly committed for the long haul. Recently, Yelp introduced
its first e-commerce offering --
-- which allows customers to order and pay for services directly
through the Yelp website or mobile app. Mobile advertising will
also be key in Yelp's quest for profitability, but some believe the
company "waited too long on mobile advertising," potentially losing
ground in a fiercely competitive space.
YELP shares have had a stellar year, gaining close to 250% in 2013
and touching a new all-time high of $73.45 just last week. Even
more recently, the shares bounced off support from their 40-day
moving average, which hasn't been violated on a daily closing basis
since early June. What's more, in the last three months, YELP has
(INDEXSP:.INX) on a relative-strength basis by 61 percentage
On the fundamental front, YELP got
within a whisper of profitable territory
last quarter, posting a second-quarter loss of a penny per share as
revenue surged 69% to $55 million. Both numbers topped analysts'
estimates, and the stock surged 23.2% the following day.
Despite this backdrop, YELP still has plenty of skeptics in its
midst. For example, the number of shorted YELP shares spiked by
15.4% to 7.5 million during the last biweekly reporting period, and
now represents almost 20% of the stock's float.
Also, the equity's 10-day put/call volume ratio tracking activity
on the International Securities Exchange (ISE), Chicago Board
Options Exchange (
), and NASDAQ OMX PHLX (PHLX) totals 1.08, revealing that in the
past two weeks, puts have been purchased to open at a slightly
faster pace than calls. This ratio is 2 percentage points shy of an
annual high, suggesting long puts have
hardly been in greater demand
(relative to calls) during the last year.
Finally, although the brokerage bunch is
beginning to come around
to the bullish side, 10 of the 19 analysts following YELP still
deem it worthy of a tepid "hold" rating. The consensus 12-month
price target of $54.50, meanwhile, sits solidly below the stock's
current price of $66.17. As the stock continues to advance, future
upgrades and/or price-target hikes (or capitulation from the
bearish investing crowd) could perpetuate buying demand on the
This article by Beth Gaston was originally published on
Schaeffer's Investment Research
Below, find some more great content from Schaeffer's Investment
Study of the Week: Big Up Days Are Good,
Analyst Downgrades: Citrix Systems, Inc. (
), Family Dollar Stores, Inc. (
), and Ariad Pharmaceuticals, Inc.
Option Trends: Broadcom Corporation (
), QUALCOMM, Inc. (QCOM), and Texas Instruments Incorporated