The analyst believes that better investments exist, and states, “We believe there are better near-term risk/reward profiles available to investors in the local and SMB internet space as visibility on Yelp’s growth stability remains low, guidance and Street expectations do not appear conservative and, with a new CFO, we see a low probability of management raising guidance for 2H’16.”
Munster notes that the company’s new CFO has brought very high expectations to the company, but Munster does not believe that Yelp will be able to outperform itself in previous quarters. The analyst concedes, “while we do not anticipate a 2H’16 guide down of any form, we do not expect guidance to move higher which, in our opinion, would be necessary to move the stock higher after earnings.”
The analyst reiterates a Neutral rating for YELP with a price target of $22.00.
Gene Munster is ranked #10 of 4,058 analysts on TipRanks. Munster maintains a 61% success rate and an average return of 16.1%. When rating YELP, the analyst has a 25% success rate.