01-May-14 10:42 ET In PlayYelp: Earnings recap & Street reaction to the qtr (66.28 +7.96) : YELP shares gapped higher this morning, now trading nearly 14% higher from yesterday's close after another beat and raise quarter. The move comes after co posted EPS $0.02 above consensus on inline revs, while FY14 guidance was raised. Shares have been out of favor since hitting an all time high of $101.75 on 3/5, selling off with other growth stocks as investors' risk tolerance waned. Note that many firms defended the stock throughout the sell-off. Shares are now trading in a high volume area and testing resistance at the 200 DMA.
Street Reaction
RBC Capital Mkts upgraded YELP to Outperform from Sector Perform. Firm has stated for some time that it would be constructive on YELP in the event of a pullback; 40% correction classifies as a pullback. The market may not want to pay up for quality growth now, but firm believes it almost inevitably will again. More importantly, as Fundamentals Analysts, firm views the probability of the 3rd consecutive year of 60%-70% rev growth as intrinsically impressive and reflective of a very large TAM and consistently strong execution. Firm also sees consistent 60%+ revenue growth in Yelp's oldest cohorts as a convincing sign of the durability of YELP's future growth rate.Northland Capital notes, YELP is the best growth story in its sector and is attractive on the pullback; co delievered another 1Q beat on sales, while heavily investing in its platform and sales force to continue its industry-leading growth; stock should get a premium valuation to its group; Outperform.Oppenheimer notes, following better 1Q14 revenue and increased FY revenue/EBITDA guidance, firm is modestly raising estimates and increasing its tgt to $80 from $78. 1Q revs increased 66% y/y, 3%/2% above Opco/Street estimates. EBITDA was in line on slightly higher R&D. UVs +29% y/y with active local accounts +64%. 2Q rev guidance was below firm's expectations, but in line with Street; 2Q EBITDA guidance was below firm's and Street estimates on increased sales headcount and international expansion. However, FY EBITDA and rev guidance increased by 4% and 3%, respectively; Outperform.Wunderlich notes, YELP reported solid results that were in line with the consensus and raised FY14 guidance revenues and EBITDA by 3% and 4%, respectively. Co continued to execute well, adding 7k new local business customers, in line with firm's 74k total estimate, while also growing its user base to 132 mln monthly uniques and mobile ads growing to 49% of the total. A lack of EBITDA leverage in 1H of the year and stalled international rev growth in Q1 were drawbacks, but firm believes they are more than offset by the advertiser and user counts and rev growth in Q1, as well as the raised rev and EBITDA for FY14; Buy.Macquarie upgraded YELP to Outperform from NeutralPiper Jaffray upgraded YELP to Overweight from NeutralUBS lowered its YELP tgt to $60 from $84; maintains NeutralPacific Crest lowered its YELP tgt to $95 from $115; maintains Outperform |
