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Yelp Reportedly Is Poised to Rebound as Economy Reopens

Yelp was weighed down as indoor dining shut down. The review site is now likely to benefit as covid vaccines increase hopes for a reopening, a report says.

After a 20% drop this year, Yelp  (YELP) - Get Yelp Inc Report shares rose Monday after the online-review company plotted a turnaround from the pandemic and covid-19 vaccines raised hopes of a recovery that could benefit the company, a media report said.

The stock of the San Francisco company at last check rose 11% to $31.19. The stock had underperformed the Nasdaq Composite index by more than 60 percentage points, Barron's reported.

A switch to a do-it-yourself advertising model from a staff of ad-sales people earlier this year is a key change to Yelp's business model, the paper reported.

Almost half of revenue now comes from Yelp's home and local services segment: plumbers, gardeners, electricians, and the like.

"Yelp’s third-quarter results demonstrate our business’s considerable resilience, highlighted by positive year-over-year revenue growth in two key areas of our long-term strategy: home and local services and our self-serve sales channel,” said Co-Founder and Chief Executive Jeremy Stoppelman in November.

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After its third-quarter results, Yelp received upgrades from RBC Capital Markets and KeyBanc Capital Markets, Barron's noted.

RBC said "the worst is behind" for Yelp and upgraded its rating to outperform from perform. Analyst Shweta Khajuria has a $34 price target on the stock, Barron's reported.

And Justin Patterson of KeyBanc said covid-19 vaccines are a positive for home service plays like Yelp, suggesting that the consensus forward revenue and margin estimates are too conservative. 

Shares of Yelp rivals Booking.com  (BKNG) - Get Booking Holdings Inc. Report and TripAdvisor  (TRIP) - Get TripAdvisor, Inc. Report advanced 2.7% and 5.2% respectively during trading on Monday. 

This year shares of Booking.com slipped 1.7% while TripAdvisor dropped 14%.