Yelp Inc. (NYSE:YELP): Stock Surged Over 9.5% Backed by Three Upgrades

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Dallas, Texas 05/02/2014 (FINANCIALSTRENDS) –  Yelp Inc. (NYSE:YELP)’s stock surged 9.77% or $5.70 and closed at $64.02 following better than expected 1Q14 results and three upgrades from equities research analysts at Macquarie, RBC Capital and Piper Jaffray.

Equity analyst Mark Mahaney of RBC wrote, “We have stated for some time that we would be constructive on YELP in the event of a pullback. A two-month 40% correction classifies as a pullback. Further, at ~8X P/S and ~30X EV/EBITDA, we view YELP valuation as more reasonable.” RBC raised the price objective for Yelp’s stock to $88 while upgrading the rating from “sector-perform” to “outperform”.

Financial Highlights:

Yelp Inc. (NYSE:YELP)’s 1Q14 revenue topped expectations and even net loss of $0.04 per share beat the street expectation of $0.06 per share. Moreover, the company raised its outlook for the remainder of FY14 and even its 2Q14 outlook is somewhat better than consensus estimate.

Yelp’s better financials were mainly driven by its strong revenue growth as revenue surged 65.6% during 1Q14 on a year over year basis to $76.4 million. Even this revenue figure beat the Zacks Consensus Estimate of $75 million as well as that of Yelp’s previous guidance where it was expecting 1Q14 revenue to be in the range of $73.5 million to $74.5 million.

Yelp Inc. (NYSE:YELP) reported 67% growth in 1Q14 local revenue as compared to 1Q13. Yelp’s brand advertising revenues grew by 57% and other revenues grew by 56% on a year over year basis. International revenues accounted for 3% of total revenue in 1Q14. 1Q14 local revenue was $65.2 million and brand advertising revenues were $7.5 million.

Yelp also expanded its international presence in Asia and Latin America with new offices in Japan and Mexico. With addition of these two country sites, now the company has presence in 26 countries across the world.

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