EU and US could reach trade deal this weekend - Reuters
On Monday, JPMorgan analyst Cory Carpenter adjusted the price target for Yelp (NYSE:YELP) shares, listed on the New York Stock Exchange (NYSE: YELP), raising it to $38.00 from the previous $35.00. Despite the increase in the price target, the analyst maintained a Neutral rating on the stock. According to InvestingPro analysis, Yelp currently trades below its Fair Value, placing it among undervalued stocks. The platform’s comprehensive health assessment rates Yelp’s financial condition as "GREAT" with a score of 3.63 out of 5. Yelp recently released its first-quarter financial results, surpassing expectations and expanding its 2025 outlook. The company reported strong demand in its Services category, which grew by 14% year-over-year, contrasting with a decline in the Restaurant & Retail sectors, which saw a 3% year-over-year decrease.
Yelp’s revenue reached $359 million, an 8% increase year-over-year, which beat the management’s guidance of $350 to $355 million. However, due to rising macroeconomic uncertainties, Yelp has adjusted its revenue outlook, narrowing the lower end of its forecast. Advertising spending remained robust during the first quarter, but the expected seasonal growth in April did not materialize, with budgets staying consistent instead.
Despite the mixed revenue trends, Yelp has consistently managed its expenses, evidenced by an adjusted EBITDA of $85 million, a significant 32% increase year-over-year, and well above the guided range of $65 to $70 million. This marks the ninth consecutive quarter where Yelp’s profit has outperformed the high-end of expectations. The company maintains strong liquidity with a current ratio of 2.89, demonstrating its ability to meet short-term obligations. For deeper insights into Yelp’s financial metrics and future prospects, investors can access the comprehensive Pro Research Report available exclusively on InvestingPro. As a result of the strong first-quarter performance, Yelp has also raised the high-end of its adjusted EBITDA outlook for the future, with plans to keep its headcount stable year-over-year.
Carpenter noted that JPMorgan had reduced its estimates for Yelp prior to the earnings release, anticipating macroeconomic challenges, particularly in the restaurant and retail sectors. However, Yelp’s results exceeded these conservative forecasts. While the estimates have been slightly increased following Yelp’s reported earnings, Carpenter expressed concern about potential downside risks to second-half revenue projections. Nevertheless, the analyst expressed greater confidence in the adjusted EBITDA estimates, citing Yelp’s demonstrated cost control, which is expected to minimize downside risk to the stock, currently trading at a multiple of 6 times EBITDA.
In other recent news, Yelp Inc. reported its Q1 2025 financial results, surpassing earnings expectations with an earnings per share (EPS) of $0.36, compared to the forecasted $0.33. Revenue reached $359 million, slightly exceeding the anticipated $353.43 million. Yelp’s net income rose by 72% year-over-year, driven by a 14% increase in services revenue, despite a 3% decline in the restaurant and retail categories. Looking forward, Yelp expects Q2 net revenue to range between $362 million and $367 million, with full-year projections between $1.465 billion and $1.485 billion. In other developments, BofA Securities revised Yelp’s financial outlook, lowering the price target to $31 from $34 while maintaining an Underperform rating. The revision was due to anticipated lower growth within Yelp’s Services and Restaurants & Retail segment and an increase in the cost of goods sold. BofA Securities forecasts a slight decline in Yelp’s revenue for 2025 and 2026, with projected revenues of $1,485 million and $1,525 million, respectively.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.