NEW YORK (TheStreeth) -- The shares of Yelp (YELP) - Get Report are plunging and hit a multi-year low after the company reported lower than expected second quarter profit and provided third quarter revenue guidance that missed expectations. A number of firms downgraded the stock following the report, while others reduced their price target but kept Buy ratings on the name.

EARNINGS: Yelp reported a loss per share of (2c), versus the consensus outlook of a 1c per share profit. The company's revenue was in-line with expectations. However, Yelp provided Q2 revenue guidance of $139M-$142M, versus the consensus outlook of of $152.66M. It also lowered its full-year revenue guidance to $544M-$550M and announced that its chairman, Max Levchin, had resigned. Additionally, the company announced that it would eliminate its brand advertising product by the end of 2015. The product's revenue dropped to $8.3M last quarter, down 8% from the same period in 2014, Yelp reported.

ANALYST REACTION: Oppenheimer analyst Jason Helfstein downgraded Yelp to Perform from Outperform, saying the reduction in the company's guidance was caused by the difficulties it has had with hiring new salespeople and sustaining high levels of sales productivity, as well as the discontinuation of its brand advertising program. Until the company can show that it has increased its sales and marketing leverage, investors will likely expect the company's margins to peak at 20% going forward, down from 40% previously, according to Helfstein. Also downgrading Yelp was Morgan Stanley analyst Brian Nowak, who lowered his rating on the shares to Equal Weight from Overweight. Among the reasons Nowak cited for his downgrade were the company's weaker than expected results, its decisions to hire fewer sales professionals, the discontinuation of its brand advertising business and the likely increase in its costs going forward. He lowered his EPS estimates for the company and set a $25 price target on the shares. Yelp was also downgraded by analysts at Topeka, Raymond James, Cowen, JMP Securities and BofA Merrill Lynch this morning. However, Citi analyst Mark May kept a Buy rating on the shares, saying that the stock's valuation already reflects the company's slower growth outlook and the investments it must make going forward. Moreover, the company still has strategic value, according to May, who cut his price target on the name to $35 from $54. Similarly, Brean Capital analyst Tom Forte wrote that Yelp still has significant value and the company could still be a takeover target. He lowered his price target on the name to $40 from $58 but kept a Buy rating on the shares.

PRICE ACTION: In morning trading, Yelp tumbled 28% to $24. Earlier in the session, the stock hit a 52-week low of $23.66.

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