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Yelp Earnings Preview: What Wall Street's Thinking

Stocks in this article: YELP

NEW YORK ( TheStreet) -- Yelp (YELP) has had a tremendous run, with shares rising 121% year-to-date, as investors flock to the San Francisco-based company.

Last quarter, Yelp shares spiked on back of news that it posted exceptional revenue growth and better-than-expected guidance.

For the second quarter, Yelp gave a revenue guidance between $52.5 million and $53.5 million, as mobile ads continue to ramp up, and the company is executing especially well with them. Mobile ads were launched late last year.

Going into the print, analysts are bullish on the report. Wall Street analysts polled by Thomson Reuters expect Yelp to report a loss of 4 cents per share on $53.29 million in revenue for the quarter, near the top end of Yelp's previous guidance.

YELP Chart YELP data by YCharts

Here's what several analysts on Wall Street are expecting from the report.

Morgan Stanley analyst Scott Devitt (Equalweight, $24 PT):

"We expect Q2:13 results will be in-line with to above the company's guidance, which calls for revenue of $53MM (+62% Y/Y) and EBITDA of $4.8MM (9.0% margin). Consensus estimates appear slightly above company guidance. We look for revenue of $54MM (+64% Y/Y), gross margin of 93.1%, and EBITDA of $5.9MM (10.9% margin). Our forecasts call for local advertising revenue of $45MM (+80% Y/Y), representing 85% of total; brand advertising revenue of $5MM (-5% Y/Y/+13% Q/Q), representing 10% of total; and other services revenue of $3MM (+71% Y/Y), representing 5% of total. We anticipate 106 active Yelp markets (+18% Y/Y; 55 US, +8% Y/Y; 51 non-US, +31% Y/Y), 42MM cumulative reviews (+40% Y/Y), 1.2MM claimed local business locations (+52% Y/Y), and 50k active local business accounts (+57% Y/Y)."

UBS analyst Eric Sheridan (Neutral, $40 PT):

"Our estimates are ahead on revenues ($54.2 mm vs. Street est. $53.3mm) and Adjusted EBITDA ($5.7mm vs. Street est. $5.1mm). Our estimates for both revenue and Adjusted EBITDA are slightly above Yelp's guided ranges of $52.5-53.5mm in revenue and $4.5-5.0mm in Adjusted EBITDA."

JMP Securities analyst Ronald Josey (Market Perform):

"We expect Yelp to deliver results that are above our projections on both revenue and EBITDA given progress in the company's efforts to 'close the loop' with local businesses with the launch of Call to Action, updates to its Nearby products, and improvements to its sales force training materials given recent positive studies from BCG and Nielsen. Specifically, we'll be looking for growth in total users and reviews, whether Active Business Accounts benefited from new revenue estimator tools, and whether Yelp was able to improve overall mobile monetization."

Cantor Fitzgerald analyst Youssef Squali (Buy, $30 Pt):

"We expect strong 2Q:13 results from YELP, with local ad revenue powering ahead at an anticipated rate of 78% Y/Y, relatively consistent with prior quarters. The local online advertising opportunity remains massive, and the number of players with scale, brand, network effect and solid execution is very limited, positioning Yelp as a prime beneficiary over time, in our view."

-- Written by Chris Ciaccia in New York

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