Shares of Yelp rose Friday after the online review company was upgraded to outperform at RBC.
RBC gave Yelp a price target of $29. Yelp stock at last check rose 9.2% to $24.02.
The investment firm said "the worst is behind" the San Francisco company. It lifted the shares from perform on account of “attractive valuation and improving fundamentals."
In a note, RBC said, "We are starting to see the impact of early signs of recovery and reopening of the economy on Yelp’s business.”
When a covid-19 vaccine is developed and comes available, the company “should benefit substantially in terms of foot traffic for businesses on its platform as well as its app traffic.”
Yelp late Thursday reported a net loss of $1 million, or 1 cent a share, compared with profit of $1 million, or 14 cents a share, in the year-earlier period.
Revenue dropped 16% to $220.8 million from $262.4 million.
A survey of analysts by FactSet produced consensus estimates for Yelp of a GAAP loss of 35 cents a share, or adjusted profit of 3 cents a share, on revenue of $202.8 million.
"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," Co-Founder and Chief Executive Jeremy Stoppelman said in a statement.
“Together with our strong balance sheet and increased sales efficiency, we are confident in our ability to return to sustainable growth in the new year while still managing the impacts of the pandemic.”