) is set to report first-quarter 2014 results on Apr 30. Last
quarter, the company delivered 50.0% negative earnings surprise.
Let's see how things are shaping up for this announcement.
Factors to Consider This Quarter
Although Yelp's fourth-quarter loss was wider than the Zacks
Consensus Estimate, it was narrower on a year-over-year basis.
Revenues for the quarter surged 71.7%, primarily due to increases
in active local business accounts. Moreover, increase in consumer
engagement through Yelp mobile acted as a positive catalyst.
We remain encouraged by the company's international expansions
which in turn will increase Yelp's active business accounts and
boost ad revenues. Moreover, Yelp's strategic partnerships with
) and YP will further increase customer engagements.
However, Yelp is enduring alleged complaints by business
owners for posting negative reviews on the website after they
refused to pay for sponsorship.
Moreover, as Yelp continues to explore and expand into new
markets, sales & marketing expenditures are expected to
increase significantly, in turn affecting margins.
Our proven model does not conclusively show that Yelp is
likely to beat the Zacks Consensus Estimate this quarter. This is
because a stock needs to have both a positive
and a Zacks Rank #1, 2 or 3 for this to happen. However, this is
not the case here as elaborated below.
Negative Zacks ESP:
Earnings ESP represent the difference between the Most Accurate
estimate and the Zacks Consensus Estimate. The Most Accurate
estimate stands at a loss of 7 cents per share while the Zacks
Consensus Estimate is narrower at a loss of 6 cents per share
resulting in an ESP of -16.67%.
Yelp's Zacks Rank #2 (Buy) when combined with a negative ESP
makes surprise prediction difficult.
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions momentum.
Other Stocks to Consider
ON Semiconductor Corp.
) has an Earnings ESP of +6.67% and a Zacks Rank #1 (Strong
Level 3 Communications, Inc.
) has an Earnings ESP of +10.71% and a Zacks Rank #1 (Strong
LEVEL 3 COMM (LVLT): Free Stock Analysis
ON SEMICON CORP (ONNN): Free Stock Analysis
YELP INC (YELP): Free Stock Analysis Report
YAHOO! INC (YHOO): Free Stock Analysis Report
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