In a research report issued today, Deutsche Bank analyst Lloyd Walmsley reiterated a Buy rating on shares of Yelp Inc (NYSE:YELP), while raising the price target to $41 (from $33), after the online review firm reported second-quarter results that beat expectations and raised its revenue guidance for the year. Yelp Shares are currently trading at $37.07, up $4.40 or 13.47%.
Walmsley wrote, “Yelp reported a beat- and-raise quarter, with r evenu e and EBITDA estimates marching higher in 2016 and 2017. Strength was both concentr ated in th e right plac es (Local Ad vertising r evenue) and broad based acro ss Local, N ational, and Self Serve, with strong margin flow-through from the beat. We see shar es moving higher, still, as investors become more comfortable in sustained revenue growth and margin expansion.”
“We increase our revenue and EBITDA estimates for 2016 and 2017 and now expect EBITDA growth of 50% y/y in 2016 and 41% y/y growth in 2017,” the analyst added.
As usual, we like to include the analyst’s trackrecord when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Lloyd Walmsley has a yearly average return of 13.5% and a 58% success rate. Walmsley has a -26.2% average return when recommending YELP, and is ranked #244 out of 4110 analysts.
Out of the 30 analysts polled by TipRanks, 15 rate Yelp stock a Buy, 12 rate the stock a Hold and 3 recommend a Sell. With a downside potential of 6%, the stock’s consensus target price stands at $34.88.