$YELP brave ppl will make lot of $$$$ today on this- Insider Mind (@InsiderMind) Apr. 8 at 08:59 AM
Yelp shares rose nearly 5% by mid-day after SunTrust analyst Robert Peck upgraded the stock from neutral to buy with an $85 target. That's about a 23% premium over the intra day price of $69.
The stock has fallen 30% since its March 3 all-time-high. In a note to clients, Peck wrote that Yelp suffered unduly from the broader correction in technology growth stocks. ?With the recent outsized correction in shares, Yelp stock now trades in-line with mid and large cap peers on growth adjusted multiples,? he wrote.
Peck also maintained that recent negative headlines regarding FTC complaints against Yelp have not impacted the growth of the company's advertising business. In response to a Wall Street Journal request, the FTC revealed that it has received more than 2,000 complaints against Yelp, mostly regarding negative reviews that small business owners view as unfounded or planted by competitors. The company's sales tactics have also come into question after some business owners alleged that Yelp representatives told them they could suppress negative reviews by buying advertising.
Peck noted that recent deals with Yahoo! (YHOO) and YP, aka the Yellow Pages, would fuel growth for the company. Peck said the combined deals could offer 400 basis points of growth. Yelp added another deal Tuesday with the announcement that it would allow Booker to let clients for its businesses book services through Yelp.