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1. Company Snapshot

1.a. Company Description

Yelp Inc.operates a platform that connects consumers with local businesses in the United States and internationally.The company's platform covers various local business categories, including restaurants, shopping, beauty and fitness, health, and other categories, as well as home, local, auto, professional, pets, events, real estate, and financial services.


It provides free and paid advertising products to businesses, which include cost-per-click search advertising and multi-location Ad products, as well as enables businesses to deliver targeted search advertising to local audiences; and business listing page products.The company also offers other services comprising Yelp Reservations that provide online reservations for restaurants, nightlife, and other venues directly from their Yelp business pages; Yelp Waitlist, a subscription-based waitlist management solution that allows consumers to check wait times and join waitlists remotely, as well as businesses to manage seating and server rotation; Yelp Knowledge program that offers business owners local analytics and insights through access to its historical data and other proprietary content; and Yelp Fusion, which offers free and paid access to content and data for consumer-facing enterprise use through publicly available APIs. In addition, it provides content licensing, as well as allows third-party data providers to update and manage business listing information on behalf of businesses.Further, the company offers its products directly through its sales force; indirectly through partners; and online through its website, as well as non-advertising partner arrangements.


It has strategic partnership with Grubhub for providing consumers with a service to place food orders for pickup and delivery.Yelp Inc.was incorporated in 2004 and is headquartered in San Francisco, California.

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1.b. Last Insights on YELP

Yelp's recent performance has been impacted by decreasing institutional investor stakes, with Ethic Inc. and Allspring Global Investments Holdings LLC reducing their positions by 29.8% and 52.4%, respectively. Additionally, the company's Q3 earnings, although beating estimates, show a modest year-over-year growth in earnings per share. Yelp's diversification into local services, such as home and auto repair, may be a strategic move to offset declines in other segments. However, its high dependence on advertising revenue remains a concern. (Source: Zacks Consensus Estimate)

1.c. Company Highlights

2. Yelp's Q3 2025 Earnings: A Strong Performance

Yelp delivered a robust financial performance in Q3 2025, with net revenue increasing by 4% year-over-year to $376 million, surpassing the high end of the company's outlook range by $6 million. The net income margin stood at 10%, with adjusted EBITDA margin at 26%. Earnings per share (EPS) came in at $0.61, significantly beating estimates of $0.47. Services revenue, a key driver of the business, grew by 7% year-over-year, underscoring the strength of Yelp's core business.

Publication Date: Nov -11

📋 Highlights
  • Record Net Revenue & Profitability:: Q3 net revenue hit $376M, with 10% net income margin and 26% adjusted EBITDA margin, driven by 7% YoY growth in Services revenue.
  • Outperformed Financial Outlook:: Net revenue exceeded top-end guidance by $6M, and adjusted EBITDA topped $98M (26% margin), $13M above expectations.
  • AI-Driven Product Expansion:: Launched 35+ AI-powered features, including Yelp Assistant (400% YoY growth in projects) and new tools like Host/Receptionist with 200,000+ restaurant partnerships.
  • Macro Challenges Persist:: Revenue pressures from April 2024 continued into Q4, with input cost inflation and reduced consumer spending affecting restaurant same-store sales.
  • Full-Year EBITDA Guidance Raised:: Full-year adjusted EBITDA now projected at $360–365M, $8M higher at midpoint, despite SBC cost reduction headwinds.

Revenue Growth and Profitability

The revenue growth was driven by the continued expansion of Yelp's data-light partnerships and the rollout of new features leveraging AI. As Jeremy Stoppelman noted, "We are reconceiving the experience on Yelp for both consumers and businesses, recently rolling out more than 35 new features and updates that leverage the power of AI in combination with our human-generated highly trusted content." This transformation is expected to drive future growth.

Valuation Metrics

Yelp's current valuation metrics indicate a relatively reasonable pricing. The P/E Ratio stands at 12.49, while the P/S Ratio is at 1.26. The EV/EBITDA ratio is 6.18, suggesting that the company's profitability is fairly valued. Additionally, the ROE of 20.33% and ROIC of 16.39% indicate strong profitability. Analysts estimate revenue growth at 3.2% for next year, which, combined with the current valuation, suggests a stable outlook.

Operational Highlights

Yelp's operational performance was also noteworthy, with the company making significant strides in AI-driven products, such as Yelp Assistant, which has seen 400% year-over-year growth. The partnership with DoorDash has expanded Yelp's restaurant footprint by about 200,000 restaurants, enhancing the platform's appeal to consumers. These initiatives are expected to drive future revenue growth and expand Yelp's total addressable market.

Guidance and Outlook

For the fourth quarter, Yelp expects expenses to remain relatively consistent with Q3, reflecting disciplined expense management. The company has narrowed its full-year adjusted EBITDA guidance to $360 million-$365 million, representing an $8 million increase at the midpoint. This guidance suggests a stable outlook for the remainder of the year, aligning with analysts' expectations for revenue growth.

3. NewsRoom

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American Century Companies Inc. Has $18.89 Million Stake in Yelp Inc. $YELP

Dec -03

Source: defenseworld.net

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Yelp to Participate in the Raymond James TMT & Consumer Conference

Dec -02

Source: businesswire.com

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Creative Planning Has $1.39 Million Stock Holdings in Yelp Inc. $YELP

Nov -29

Source: defenseworld.net

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Can Netflix House Revive Dead Mall Spaces And Boost Brand Loyalty?

Nov -17

Source: fool.com

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Campbell & CO Investment Adviser LLC Acquires Shares of 12,526 Yelp Inc. $YELP

Nov -17

Source: defenseworld.net

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Yelp Stock Gains as Q3 Earnings and Revenues Surpass Estimates

Nov -07

Source: zacks.com

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Yelp Inc. (YELP) Q3 2025 Earnings Call Transcript

Nov -07

Source: seekingalpha.com

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Here's What Key Metrics Tell Us About Yelp (YELP) Q3 Earnings

Nov -07

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.18%)

6. Segments

Advertising - Services

Expected Growth: 7%

Yelp's 7% growth in Advertising Services is driven by increasing adoption of online advertising, rising demand for location-based targeting, and growing popularity of Yelp's platform among small and medium-sized businesses. Additionally, Yelp's investments in artificial intelligence and machine learning are enhancing ad relevance and effectiveness, leading to higher ROI for advertisers and increased spending.

Advertising - Restaurants, Retail & Other

Expected Growth: 5%

Yelp's 5% growth in Advertising - Restaurants, Retail & Other is driven by increasing online ordering and delivery adoption, rising demand for digital marketing solutions, and growing consumer engagement on the Yelp platform. Additionally, the company's investments in AI-powered advertising products and expansion into new markets are contributing to growth.

Other

Expected Growth: 4%

Yelp's 'Other' segment, with 4% growth, is driven by increasing demand for Yelp's non-advertising products, such as Yelp Reservations, Yelp Waitlist, and Yelp Knowledge, which provide additional revenue streams. Additionally, the company's focus on expanding its e-commerce capabilities and improving user engagement through enhanced features and experiences also contribute to this growth.

Transactions

Expected Growth: 8%

Yelp's 8% growth driven by increasing adoption of online food ordering and delivery, expansion of Yelp Eat24, and growth in Yelp Core revenue. Additionally, rising demand for digital advertising, improved sales execution, and increased investments in product development and marketing contribute to the growth.

7. Detailed Products

Yelp Ads

Yelp Ads is a platform that allows businesses to advertise on Yelp, increasing their visibility and reach to potential customers.

Yelp Reservations

Yelp Reservations is a table management system that allows restaurants to manage reservations, waitlists, and table assignments.

Yelp Waitlist

Yelp Waitlist is a waitlist management system that allows restaurants to manage wait times, notify customers, and optimize seating.

Yelp Knowledge

Yelp Knowledge is a business intelligence platform that provides insights and analytics to help businesses understand their online presence and customer behavior.

Yelp WiFi

Yelp WiFi is a guest WiFi solution that allows businesses to offer free WiFi to customers in exchange for their contact information.

Yelp Reviews

Yelp Reviews is a review management platform that allows businesses to manage and respond to customer reviews.

8. Yelp Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Yelp's services are unique, but users can substitute with other review platforms like Google Reviews or TripAdvisor. However, Yelp's strong brand recognition and large user base make it difficult for users to switch.

Bargaining Power Of Customers

Individual customers have limited bargaining power due to Yelp's large user base and diversified customer base. However, businesses may have some bargaining power due to their advertising revenue.

Bargaining Power Of Suppliers

Yelp's suppliers are primarily small businesses and individuals who provide content and reviews. They have limited bargaining power due to the large number of suppliers and the ease of replacing them.

Threat Of New Entrants

The threat of new entrants is high due to the low barriers to entry in the online review platform market. New entrants can easily replicate Yelp's business model, but Yelp's strong brand recognition and large user base provide a competitive advantage.

Intensity Of Rivalry

The online review platform market is highly competitive, with many players competing for market share. Yelp faces intense competition from Google Reviews, TripAdvisor, and other review platforms, which can lead to pricing pressure and advertising revenue competition.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 10.43%
Debt Cost 3.95%
Equity Weight 89.57%
Equity Cost 11.13%
WACC 10.38%
Leverage 11.65%

11. Quality Control: Yelp Inc. passed 9 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Nexstar Media

A-Score: 7.3/10

Value: 7.0

Growth: 8.2

Quality: 7.6

Yield: 7.0

Momentum: 7.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
TEGNA

A-Score: 6.6/10

Value: 8.0

Growth: 5.8

Quality: 6.7

Yield: 5.0

Momentum: 9.0

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Yelp

A-Score: 5.5/10

Value: 6.2

Growth: 7.8

Quality: 8.2

Yield: 0.0

Momentum: 4.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
CarGurus

A-Score: 5.2/10

Value: 3.0

Growth: 6.8

Quality: 8.2

Yield: 0.0

Momentum: 7.5

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Twilio

A-Score: 4.5/10

Value: 1.6

Growth: 8.1

Quality: 5.9

Yield: 0.0

Momentum: 8.5

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
IAC

A-Score: 3.7/10

Value: 6.8

Growth: 2.7

Quality: 4.5

Yield: 0.0

Momentum: 2.0

Volatility: 6.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

29.97$

Current Price

29.97$

Potential

-0.00%

Expected Cash-Flows