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“… we upgrade YELP from Neutral to Buy, with a new PT of $47 (from $38) on the back of stable/rising local advertising trends, an analysis of the incremental margin opportunity and the potential for stable/increased shareholder returns in the years ahead,” they commented.
The analysts are increasingly positive about YELP’s ability to maintain ~M-HSD% revenue growth (’24-’27E). Factors include a stable-to-improving local advertising environment, recent ad tech investments driving sustained price inflation, and scaling of newer initiatives like YELP Audiences for better auction density and revenue diversification. Steady margin expansion is expected through high-margin growth, limited opex, and potential upside from shareholder returns.
Despite a +38% year-to-date stock increase (+36% since Q1’23 earnings), they view valuation as still attractive at ~9x their 2024 GAAP EBITDA and ~15x P/E ex-cash based on 2025 GAAP EPS estimates.
