Yelp (NYSE:YELP) Downgraded to "Strong Sell" Rating by Zacks Research

Key Points

• Zacks Research downgraded Yelp from a "hold" to a "strong sell" and several other brokers have cut ratings and price targets, leaving the consensus recommendation as "Reduce" with an average target price of $28.50.
• Yelp's most recent quarter beat EPS estimates ($0.61 vs. $0.47) but revenue fell 0.5% year-over-year; the stock trades around $27.43 with a market cap of $1.63 billion and a P/E of 12.19.
• Company insiders sold roughly 208,764 shares worth $5.62 million in the last quarter (insiders own 8.0%), while institutional investors hold about 90.11% of the stock.

Yelp (NYSE:YELP - Get Free Report) was downgraded by stock analysts at Zacks Research from a "hold" rating to a "strong sell" rating in a research report issued on Wednesday,Zacks.com reports.

A number of other brokerages also recently issued reports on YELP. Morgan Stanley dropped their price target on shares of Yelp from $30.00 to $28.00 and set an "underweight" rating on the stock in a research report on Tuesday, January 13th. JPMorgan Chase & Co. dropped their target price on shares of Yelp from $30.00 to $22.00 and set a "neutral" rating on the stock in a report on Tuesday, February 17th. The Goldman Sachs Group cut their price target on shares of Yelp from $33.00 to $25.00 and set a "neutral" rating on the stock in a research report on Tuesday, February 17th. UBS Group set a $28.00 price objective on Yelp in a research report on Tuesday, January 13th. Finally, Weiss Ratings downgraded Yelp from a "hold (c-)" rating to a "sell (d+)" rating in a research note on Wednesday, February 11th. One investment analyst has rated the stock with a Buy rating, three have assigned a Hold rating and four have issued a Sell rating to the company's stock. Based on data from MarketBeat, the stock currently has an average rating of "Reduce" and an average target price of $28.50.

Yelp Price Performance

YELP opened at $27.43 on Wednesday. Yelp has a fifty-two week low of $19.60 and a fifty-two week high of $41.22. The company's 50 day moving average price is $23.87 and its two-hundred day moving average price is $27.98. The firm has a market capitalization of $1.63 billion, a price-to-earnings ratio of 12.19, a PEG ratio of 0.68 and a beta of 0.47.

Yelp (NYSE:YELP - Get Free Report) last issued its quarterly earnings results on Thursday, February 12th. The local business review company reported $0.61 EPS for the quarter, topping analysts' consensus estimates of $0.47 by $0.14. The company had revenue of $359.99 million for the quarter, compared to analyst estimates of $358.70 million. Yelp had a net margin of 9.94% and a return on equity of 19.96%. Yelp's revenue was down .5% compared to the same quarter last year. During the same quarter in the previous year, the business earned $0.62 earnings per share. As a group, equities research analysts predict that Yelp will post 2.22 EPS for the current year.

Insider Buying and Selling at Yelp

In other news, Director Dan Jedda sold 1,464 shares of the stock in a transaction that occurred on Monday, February 23rd. The shares were sold at an average price of $21.02, for a total transaction of $30,773.28. Following the completion of the transaction, the director directly owned 17,100 shares of the company's stock, valued at $359,442. This represents a 7.89% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, CFO David A. Schwarzbach sold 10,000 shares of Yelp stock in a transaction that occurred on Thursday, March 12th. The stock was sold at an average price of $25.00, for a total transaction of $250,000.00. Following the completion of the sale, the chief financial officer directly owned 227,959 shares in the company, valued at $5,698,975. This trade represents a 4.20% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold 208,764 shares of company stock worth $5,620,693 in the last quarter. 8.00% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

Institutional investors have recently made changes to their positions in the company. Hsbc Holdings PLC increased its holdings in Yelp by 33.5% in the 4th quarter. Hsbc Holdings PLC now owns 40,633 shares of the local business review company's stock worth $1,231,000 after acquiring an additional 10,204 shares during the last quarter. Rockefeller Capital Management L.P. raised its position in shares of Yelp by 71.3% in the fourth quarter. Rockefeller Capital Management L.P. now owns 1,158 shares of the local business review company's stock valued at $35,000 after purchasing an additional 482 shares during the period. Corient Private Wealth LLC raised its position in shares of Yelp by 5.9% in the fourth quarter. Corient Private Wealth LLC now owns 8,302 shares of the local business review company's stock valued at $252,000 after purchasing an additional 464 shares during the period. River Road Asset Management LLC lifted its stake in shares of Yelp by 1.4% during the 4th quarter. River Road Asset Management LLC now owns 1,161,711 shares of the local business review company's stock valued at $35,304,000 after buying an additional 15,849 shares in the last quarter. Finally, Mercer Global Advisors Inc. ADV bought a new position in Yelp in the 4th quarter worth approximately $353,000. Hedge funds and other institutional investors own 90.11% of the company's stock.

About Yelp

Yelp is a digital platform that connects consumers with local businesses through user-generated reviews, ratings and multimedia content. The company's flagship offerings include the Yelp website and mobile applications for iOS and Android, where users can search for and discover restaurants, shops, service providers and other points of interest. In addition to crowd-sourced reviews and photographs, Yelp provides business profile pages featuring hours, contact information, menus and direct messaging capabilities.

Yelp generates revenue primarily through advertising services sold to small and medium-sized enterprises.

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