Is Yelp’s Earnings Beat With Slower Revenue Growth Altering The Investment Case For Yelp (YELP)?

• In its most recent quarter, Yelp reported past revenues of US$376.0 million, a 4.4% year-on-year increase that exceeded analyst expectations and came with a solid EBITDA beat plus slightly higher full-year EBITDA guidance.
• Despite surpassing forecasts, Yelp delivered the slowest revenue growth among its social networking peers, underscoring ongoing questions about its relative growth profile and competitive position.
• Now we’ll examine how this earnings beat, alongside Yelp’s comparatively modest revenue growth, may influence the company’s broader investment narrative.

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Yelp Investment Narrative Recap

To own Yelp, you need to believe it can translate its established brand and review ecosystem into resilient advertising and services revenue, despite competitive and macro headwinds. The latest quarter’s revenue and EBITDA beat modestly supports that view, but the slowest growth among social networking peers keeps the core risk front and center: whether Yelp can reaccelerate demand from small business advertisers. The short term catalyst remains execution on monetization and cost control, and this update does not materially change that equation.

The recent reaction from Wall Street highlights this tension. Morgan Stanley’s decision to maintain an Underweight rating while cutting its price target to US$28.00, alongside a broader Hold consensus, lines up with the mixed earnings picture: solid profitability, but relatively modest top line growth. That cautious stance ties directly into the key catalyst for the stock, which is whether Yelp can prove that its slower growth profile still supports durable value creation over time.

Yet behind the headline revenue beat, there is a structural risk in weakening RR&O demand that investors should be aware of…

Read the full narrative on Yelp (it’s free!)

Yelp’s narrative projects $1.6 billion revenue and $193.5 million earnings by 2028. This requires 3.5% yearly revenue growth and about a $44.4 million earnings increase from $149.1 million today.

Uncover how Yelp’s forecasts yield a $34.44 fair value, a 17% upside to its current price.

Exploring Other Perspectives

Six fair value estimates from the Simply Wall St Community span about US$20.00 to over US$66.00, showing how far apart individual views on Yelp’s worth can be. When you set that dispersion against Yelp’s slower recent revenue growth versus peers, it underlines why many market participants are weighing competitive pressures and advertiser demand very carefully.

Explore 6 other fair value estimates on Yelp – why the stock might be worth 32% less than the current price!

Build Your Own Yelp Narrative

Disagree with existing narratives? Create your own in under 3 minutes – extraordinary investment returns rarely come from following the herd.

• A great starting point for your Yelp research is our analysis highlighting 4 key rewards that could impact your investment decision.
• Our free Yelp research report provides a comprehensive fundamental analysis summarized in a single visual – the Snowflake – making it easy to evaluate Yelp’s overall financial health at a glance.

No Opportunity In Yelp?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

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