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Yelp (YELP) Q4 Earnings: What's in the Cards this Time?

Yelp Inc. YELP is set to report fourth-quarter 2016 results on Feb 9. Though in the last quarter, the company posted a 200.00% positive earnings surprise, it has an average four-quarter negative earnings surprise of 142.86%.

Let's see how things are shaping up for this quarter.

Factors to Consider

Yelp delivered strong results in the third quarter, surpassing both top- and bottom-line expectations on the back of significant improvement in cumulative reviews and local advertising accounts. Nearly 70% of the paid reviews came from Yelp's mobile app, per management. Given its strong results, management had raised its revenue expectations for the fiscal.

However, Yelp's international business has been a dampener. Management said it will be downsizing its international operations and channelling the resources to strengthen its core operations in the U.S and Canada, which is a positive in our view.

Nonetheless, stiff competition from players like Uber, GrubHub GRUB , OpenTable and Amazon and even major tech companies like Google and Facebook among others, is a big concern. All these companies are increasing their efforts to get a bigger share of the market.

For the fourth quarter, management expects revenues in a range of $191 million to $195 million.

Yelp Inc. Price and EPS Surprise

Yelp Inc. Price and EPS Surprise | Yelp Inc. Quote

Earnings Whispers

Our proven model does not conclusively show that Yelp is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.

Zacks ESP : Yelp has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 3 cents.You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank : Yelp has a Zacks Rank #1 (Strong Buy) which when combined with a 0.00% ESP, makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are a couple of stocks that, as per our model, have the right combination of elements to post an earnings beat this quarter:

Pandora Media, Inc. P with an Earnings ESP of +10.81% and a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here .

Activision Blizzard, Inc. ATVI with an Earnings ESP of +2.78% and a Zacks Rank #3.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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