Yelp (NYSE:YELP) Sets New 12-Month Low on Analyst Downgrade

Key Points

• Yelp shares hit a new 52-week low on Friday following a downgrade from Bank of America, which lowered its price target for the stock from $31.00 to $30.00 and maintains an underperform rating.
• In addition to Bank of America's downgrade, other analysts have also reduced their price targets for Yelp, with Morgan Stanley and JPMorgan Chase & Co. both assigning lower targets of $30.00 and $35.00, respectively.
• Insider transactions included significant sales by CTO Sam Eaton and another insider, with recent sales totaling over 58,000 shares in the last quarter, raising concerns about insider confidence in the stock's future performance.

Yelp Inc. (NYSE:YELP - Get Free Report)'s stock price hit a new 52-week low during trading on Friday after Wall Street Zen downgraded the stock from a strong-buy rating to a buy rating. The company traded as low as $32.15 and last traded at $31.76, with a volume of 3466 shares changing hands. The stock had previously closed at $34.18.

A number of other analysts have also issued reports on the company. Morgan Stanley reduced their target price on Yelp from $35.00 to $30.00 and set an "underweight" rating for the company in a report on Thursday, April 17th. JPMorgan Chase & Co. reduced their target price on Yelp from $36.00 to $35.00 and set a "neutral" rating for the company in a report on Tuesday, April 22nd. Finally, Bank of America reduced their target price on Yelp from $31.00 to $30.00 and set an "underperform" rating for the company in a report on Friday. Two equities research analysts have rated the stock with a sell rating, four have assigned a hold rating and one has given a buy rating to the company's stock. Based on data from MarketBeat.com, the stock has an average rating of "Hold" and a consensus price target of $34.00.

Insiders Place Their Bets

In other news, CTO Sam Eaton sold 12,904 shares of the company's stock in a transaction on Thursday, May 22nd. The shares were sold at an average price of $38.18, for a total value of $492,674.72. Following the transaction, the chief technology officer directly owned 145,064 shares of the company's stock, valued at approximately $5,538,543.52. This represents a 8.17% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, insider Craig Saldanha sold 1,000 shares of the company's stock in a transaction on Wednesday, July 23rd. The stock was sold at an average price of $35.23, for a total transaction of $35,230.00. Following the completion of the transaction, the insider directly owned 212,720 shares in the company, valued at $7,494,125.60. This trade represents a 0.47% decrease in their ownership of the stock. The disclosure for this sale can be found here. Insiders sold a total of 58,345 shares of company stock valued at $2,151,656 in the last three months. Company insiders own 7.40% of the company's stock.

Hedge Funds Weigh In On Yelp

Hedge funds have recently bought and sold shares of the business. Principal Financial Group Inc. boosted its holdings in Yelp by 2.2% during the first quarter. Principal Financial Group Inc. now owns 374,536 shares of the local business review company's stock valued at $13,869,000 after acquiring an additional 8,239 shares during the period. Northern Trust Corp lifted its stake in Yelp by 8.3% during the fourth quarter. Northern Trust Corp now owns 752,742 shares of the local business review company's stock worth $29,131,000 after purchasing an additional 57,610 shares during the period. Elevate Capital Advisors LLC bought a new position in Yelp during the first quarter worth about $2,766,000. Jefferies Financial Group Inc. lifted its stake in Yelp by 169.1% during the first quarter. Jefferies Financial Group Inc. now owns 16,662 shares of the local business review company's stock worth $617,000 after purchasing an additional 10,471 shares during the period. Finally, Allspring Global Investments Holdings LLC increased its holdings in shares of Yelp by 272.5% during the first quarter. Allspring Global Investments Holdings LLC now owns 56,595 shares of the local business review company's stock worth $2,160,000 after buying an additional 41,400 shares in the last quarter. 90.11% of the stock is owned by institutional investors and hedge funds.

Yelp Stock Up 1.7%

The company has a market cap of $1.98 billion, a price-to-earnings ratio of 14.02, a price-to-earnings-growth ratio of 0.73 and a beta of 0.97. The company's fifty day moving average price is $34.82 and its two-hundred day moving average price is $36.00.

Yelp (NYSE:YELP - Get Free Report) last posted its quarterly earnings data on Thursday, August 7th. The local business review company reported $0.67 earnings per share for the quarter, topping the consensus estimate of $0.48 by $0.19. The company had revenue of $370.39 million during the quarter, compared to analyst estimates of $365.71 million. Yelp had a net margin of 10.28% and a return on equity of 20.17%. The company's revenue was up 3.7% on a year-over-year basis. During the same quarter last year, the business posted $0.54 earnings per share. Research analysts forecast that Yelp Inc. will post 2.22 earnings per share for the current year.

About Yelp

Yelp Inc operates a platform that connects consumers with local businesses in the United States and internationally. The company's platform covers various categories, including restaurants, shopping, beauty and fitness, health, and other categories, as well as home, local, auto, professional, pets, events, real estate, and financial services.