NEW YORK (TheStreet) -- Shares of Yelp (YELP) - Get Report are retreating 2.7% to $29.56 late Wednesday morning as Wells Fargo downgraded shares to "underperform" from "market perform," the Fly reports.
The firm also reduced its price target range on the stock to $21 to $23 from $22 to $24.
Wells Fargo said consensus estimates "embed too much optimism" for 2017 and 2018.
Additionally, the San Francisco-based company will face an "increasingly challenging competitive revenue and profit environment" in the next few years, according to the firm.
Yelp's competition in the home and local services market is rising as Alphabet's (GOOGL) Google unit, Angie's List (ANGI) and IAC's (IAC) HomeAdvisor all boost their efforts in the sector, Wells Fargo added.
The firm believes Yelp will face challenges in meeting its long-term margin goals, the Fly said.
Also, the company's revenue from non-food transactions looks to have declined in the 2016 second quarter compared to last year, Wells Fargo noted.
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 articles's author.
You can view the full analysis from the report here: YELP