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

JPMorgan analyst Kaizad Gotla (Overweight, $94 PT)

"Yelp reported strong 4Q revenue growth driven by an acceleration in active accounts as well as upside in brand advertising. The company's strong performance was driven by significant revenue accelerations across Yelp's US cohorts and we believe international and the Yelp Platform offer significant future upside opportunities."

Oppenheimer analyst Jason Helfstein (Perform, $78 PT)

"Following better than expected 4Q results, we are modestly increasing our target from $76 to $78, based on a peer high-growth terminal multiple. Revenue rose 72% y/y, 6%/5% above Opco/Street, on higher brand advertising. EBITDA was 9% above our estimate; margins were largely in line. UVs accelerated to +40% y/y, while active local accounts ex-Qype accelerated to +64%. While FY14 revenue guidance was roughly in line, EBITDA guidance was 25%/12% below Opco/Street, reflecting increased investments in sales & marketing and R&D. As such, we are decreasing '14E and '15E EBITDA by 25% and 22%. Target assumes 15x 2018E EBITDA, consistent with high-growth Internet peers, vs. 10x previously. Maintain Perform rating on valuation."

Cantor Fitzgerald analyst Youssef Squali (Buy, $84 PT)

"Yelp reported another impressive quarter, with revenue and EBITDA exceeding the high end of guidance and consensus by ~5%. Core local ad revenue growth continues to power ahead with its oldest cohorts (impressively) showing acceleration in each of the last two quarters. We're maintaining a BUY rating and raising our PT to $84 (from $69)."

Pacific Crest Securities analyst Evan Wilson (Outperform, $90 PT)

"The only disappointment was a 2014 EBITDA outlook that was below our expectations. However, given Yelp's track record over the past year, we think most investors will look through this because of: (1) a valuation based on a revenue that is going higher, (2) a track record of being conservative and (3) the fact that investment in sales and the platform is a huge near- and long-term opportunity. In this part of the market and economic cycle, fortune is favoring the bold, and Yelp is showing that it is moving faster to capitalize on the local opportunity."

-- Written by Chris Ciaccia in New York

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