Incannex Healthcare stock tumbles after filing $100M offering
On Friday, BofA Securities made a revision to Yelp Inc’s (NYSE:YELP) financial outlook, reducing the price target to $31 from the previous $34 while keeping an Underperform rating on the stock. The adjustment was based on anticipated lower growth within Yelp’s Services and Restaurants & Retail (RR&O) segment, as well as an increase in the cost of goods sold (COGS).
In detail, BofA Securities expects a slight decline in Yelp’s revenue for the year 2025, with projections now set at $1,485 million, a 0.3% decrease from earlier estimates. Additionally, the firm forecasts a 9% reduction in GAAP earnings per share (EPS) for the same year, bringing it down to $2.07. This revision reflects a slightly higher tax rate than previously anticipated. The company currently trades at a PEG ratio of 0.44, indicating potential undervaluation relative to its growth prospects.
Looking ahead to 2026, BofA Securities anticipates a 2% drop in revenue to $1,525 million and a corresponding 9% decrease in EPS to $2.80. The new price objective of $31 is derived from these revised 2026 GAAP EPS estimates, while the valuation multiple remains unchanged at 11 times.
The report from BofA Securities indicated that without a clear catalyst to reignite growth, Yelp’s stock is likely to continue trading at a discount compared to the broader market and its online media peers. This outlook suggests that investors may not see a significant change in Yelp’s stock valuation in the near future unless the company can identify and leverage new growth drivers.
In other recent news, Yelp Inc. reported its Q1 2025 financial results, surpassing expectations with an earnings per share (EPS) of $0.36, above the forecasted $0.33. The company achieved revenue of $359 million, slightly exceeding the anticipated $353.43 million. Yelp’s net income rose by 72% year-over-year to $24 million, driven by a 14% increase in services revenue, while the restaurant and retail segments experienced a 3% decline. The company introduced 15 new features, focusing on AI capabilities, which are expected to enhance its competitive edge. Yelp also announced an integration with Zapier, aiming to streamline connections with over 800 CRM platforms. Looking ahead, Yelp projects Q2 net revenue to range between $362 million and $367 million, with full-year revenue expected between $1.465 billion and $1.485 billion. Analyst feedback noted continued strength in Yelp’s services business, with firms like KeyBanc and Craig Hallum showing interest in the company’s AI strategy and advertiser sentiment. Yelp’s plans include further AI-driven product enhancements to maintain growth momentum.
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