NEW YORK (TheStreet) -- Yelp (YELP) - Get Yelp Inc Report shares are plunging 7.51% to $19.51 on Wednesday morning after UBS downgraded the company earlier today to "sell" from "neutral" with a $17 price target.
The San Francisco-based company, which connects consumers with local businesses, may "enter a period of slowing revenue growth and heightened margin pressures, driven by increased competition in Yelp's core business and share gains by larger digital ad companies," analysts said.
Other critical concerns include decelerating traffic growth and increased spending on marketing.
Given these challenges, analysts are questioning Yelp's ability to make a turnaround.
The firm's current price target on the stock implies a downside of 20%.
Separately, TheStreet Ratings currently has a "Sell" rating on the stock with a letter grade of D.
The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles' author.
You can view the full analysis from the report here: YELP