The firm hiked its price target for the San Francisco-based crowdsource review service to $31 from $27, according to Barron's.
The downgrade stems from several areas, such as management watering down the sustainability of its ad revenue growth. Citi added that they believe margins will continue to stay under pressure with their estimates remaining below consensus.
"Our target implies a 16x forward EBITDA multiple, which is in-line with Yelp's peer group both an absolute and growth-adjusted basis," the firm stated in an analyst note.
Last week, the company announced it will enable a new "Pokemon Go" filter to its website, allowing users to find businesses that are near a "Pokestop," CNN Money reports.
Shares of Yelp are up by 0.79% to $29.43 in afternoon trading on Wednesday.
Separately, 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's author. TheStreet Ratings has this to say about the recommendation:
We rate YELP INC as a Sell with a ratings score of D. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. 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.
You can view the full analysis from the report here: YELP