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Yelp Screams Higher: What Wall Street Is Saying (Update 1)

Stocks in this article: YELP

Updated from 7:55 a.m. to include thoughts from Pacific Crest Securities analyst.

NEW YORK (TheStreet) -- Yelp (YELP - Get Report) shares surged 17.8% to $88.62 in early trading Thursday trading after the local advertising company posted fourth-quarter revenue above consensus and issued strong guidance.

San Francisco-based Yelp lost 3 cents a share in the quarter on revenue of $70.7 million, up 72% year over year. Analysts polled by Thomson Reuters were looking for a loss of 2 cents a share on sales of $67.22 million.

Yelp noted cumulative reviews climbed 47% year over year to 53 million, and average monthly unique visitors surged 39% during the same time frame to about 120 million.

The company also offered first-quarter and full-year guidance that was sharply higher than consensus. For the first quarter, Yelp said it expects revenue between $73.5 million and $74.5 million, better than the $73.25 million Wall Street was looking for. For the full year, Yelp anticipates sales to be between $353 million and $358 million. Analysts are looking for sales of $347.85 million.

YELP ChartYELP data by YCharts


Following the report, Wall Street was by and large supremely positive on the quarter, with several analysts raising estimates and price targets. Here's what a few of them had to say:

UBS analyst Eric Sheridan (Neutral, $84 PT)

"We remain bullish on Yelp's fundamentals, but given the execution hurdles required to address new markets, rich valuation multiples, decelerating revenue growth, growing competition for digital local advertising (SoLoMo) & the stock's 2013 strength, we see limited upside in the near term and remain on the sideline. As we progress into 2014, we believe that investors will focus on the International monetization ramp, the potential for additional variable pricing options (particularly in light of a recent emphasis on local shown by Google & Facebook), Yelp Platform vertical expansion, and the needed investments (read leverage implication) for such initiatives."

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