Shares of Yelp (YELP) have done well this year, up roughly 11% despite Monday's 1% decline. Investors are hoping the stock's momentum will keep up after the company reports earnings on Tuesday after the close.
One person who plans to dig through the results is Jim Cramer, the co-manager of the Action Alerts PLUS portfolio.
"Yelp is forever going to be a takeover target," Cramer said from the floor of the New York Stock Exchange.
However, perhaps the company should think about an acquisition or two of its own, or possibly a merger. The company needs a "tightened vertical," Cramer said, explaining that a tie-up with a company like Groupon (GRPN) could be highly beneficial.
Food delivery service GrubHub (GRUB) could also be a good combination, and while "this is a stretch," Cramer noted Square's (SQ) food-delivery service Caviar could also make a combination with Yelp very interesting.
Either way, Yelp needs some M&A now. Analysts are looking for the company to report a loss of 7 cents per share on revenue of $169.82 million.