Yelp shares rose nearly 5% by mid-day after SunTrust analyst Robert Peck upgraded the stock from neutral to buy with an $85 target. That's about a 23% premium over the intra day price of $69.The stock has fallen 30% since its March 3 all-time-high. In a note to clients, Peck wrote that Yelp suffered unduly from the broader correction in technology growth stocks. ?With the recent outsized correction in shares, Yelp stock now trades in-line with mid and large cap peers on growth adjusted multiples,? he wrote. Peck also maintained that recent negative headlines regarding FTC complaints against Yelp have not impacted the growth of the company's advertising business. In response to a Wall Street Journal request, the FTC revealed that it has received more than 2,000 complaints against Yelp, mostly regarding negative reviews that small business owners view as unfounded or planted by competitors. The company's sales tactics have also come into question after some business owners alleged that Yelp representatives told them they could suppress negative reviews by buying advertising. Peck noted that recent deals with Yahoo! (YHOO) and YP, aka the Yellow Pages, would fuel growth for the company. Peck said the combined deals could offer 400 basis points of growth. Yelp added another deal Tuesday with the announcement that it would allow Booker to let clients for its businesses book services through Yelp. Some investors on StockTwits.com said technical levels in Yelp's chart supported Peck's call. The stock fell to its 200 day moving average on April 7. The 200-day moving average is seen as an inflection point by many investors when stocks tend to reverse direction.
$YELP Nice day two after yesterday move below 200ma. - JohnnyTrades (@Johhny) Apr. 8 at 12:06 PM
$Yelp at the 200 day...looks due for a bounce this week. Needs to regain the 61% fib http://stks.co/h0Tdi - Jordan Black (@TheTechnicalRoom) Apr. 7 at 05:27 PMDespite the gains, some cashtaggers said they would hold off buying into Yelp until it was clear that positive momentum had returned.
$YELP itching to go long here and this bounce. Probably give it another day or 2 for confirmation that it bottomed. - Peter (@Glasses) Apr. 7 at 03:12 PMAt the time of publication the author had no position in any of the stocks mentioned. This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.