The firm also upped its price target to $33 from $26 on shares of the San Francisco-based company.
The higher rating and price target reflect stabilized salesforce productivity, more confidence in management and improvements in ad units and systems bolstering Deutsche Bank's long-term outlook.
Additionally, the firm increased its fiscal 2016 revenue estimate to $702 million from $697 million.
Deutsche Bank sees considerable upside in its bull case if Yelp can continue to build on improving salesforce efficiency and sustain first quarter levels of ad fulfillment.
"Beyond 2016, challenges remain, but we prefer to be long the shares for upside this year and better long-term optionality given increased confidence that new financial leadership at Yelp can help drive product and monetization innovation in 2017 and beyond," the firm wrote in an analyst note.
Separately, TheStreet Ratings Team has a "Sell" rating with a score of D on the stock.
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 article's author.
You can view the full analysis from the report here: YELP