Yelp Inc. (
reached a new 52-week high of $36.14 on Thursday, Jun 27, 2013.
The bullish run reflects Yelp's better-than-expected top-line
growth in the first quarter of 2013, expanding local ads business
and strong growth opportunity from higher mobile ads spending.
The closing price of Yelp on Jun 27 was $34.33, representing a
strong one-year return of about 50.6% and a year-to-date return
of about 74.3%. The S&P 500 jumped 21.1% and 10.3%,
respectively during the same period. Average volume of shares
traded over the last three months stands at approximately
Currently, Yelp carries a Zacks Rank #3 (Hold) and has a market
cap of $2.25 billion.
Modest 1Q Results, Upbeat Guidance
Yelp reported a loss of 8 cents per share in the first quarter of
2013, significantly narrower than the year-ago quarter loss of 31
cents but slightly wider than the Zacks Consensus Estimate of 5
cents loss per share.
Revenues for the quarter surged 68.5% from the year-ago quarter
to $46.1 million, which comfortably surpassed management guided
range of $44.0 million-$44.5 million as well as the Zacks
Consensus Estimate of $45.0 million.
The better-than-expected top-line growth helped Yelp to raise its
fiscal 2013 outlook. Yelp raised its revenue guidance range from
$212.0 million-$216.0 million to $216.0 million-$218.0 million.
Yelp expects revenues in the range of $52.5 million to $53.5
million for the second quarter of 2013.
Key Growth Catalysts
We believe that higher mobile ad spending presents a significant
growth opportunity for Yelp going forward. According to research
firm Forrester, ad spending on mobile devices will represent 29%
of total online ad spending in the U.S. by 2018.
Yelp's increasing mobile penetration (approximately 45.0% of all
Yelp searches were through mobile) will help the company to
better monetize the platform going forward. Additionally, Yelp's
and continuing international expansion are other long-term
However, increasing investments and higher sales & marketing
expenses are expected to drag profitability in the near term.
The Zacks Consensus Estimate of a loss of 3 cents for the second
quarter of 2013 has remained steady over the last 30 days. For
fiscal 2013, the Zacks Consensus Estimate moved down a couple of
cents to 14 cents loss per share over the past 30 days,
reflecting near-term concerns.
Other Stocks to Consider
Another stock, which is worth considering, is
with a Zacks Rank #1 (Strong Buy).
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