YELP

Yelp Inc

TMT


Presented:07/14/2020
Price:$23.09
Cap:$1.66B
Current Price:$34.90
Cap:$2.34B

Presented

Date07/14/2020
Price$23.09
Market Cap$1.66B
Ent Value$1.04B
P/E Ratio74.13x
Book Value$12.48
Div Yield0%
Shares O/S71.89M
Ave Daily Vol1,434,244
Short Int20.70%

Current

Price$34.90
Market Cap$2.34B
Yelp, Inc. engages in the provision of an one-stop local platform for consumers to discover, connect, and transact with local businesses of all sizes. It operates through the following segments: Advertising, Transactions, and Other services. The Advertising segment offers a range of free and paid advertising products to businesses of all sizes, including the ability to deliver targeted search advertising to large local audiences through website and mobile app. The Transactions segment comprises several features and consumer-interactive tools to facilitate transactions between consumers and the local businesses can find on Yelp. The Other Services segment consists revenue through subscription services, licensing payments for access to Yelp data, and other non-advertising, non-transaction arrangements. The company was founded by Jeremy Stoppelman and Russell Simmons in July 2004 and is headquartered in San Francisco, CA.

Publicly traded companies mentioned herein: Alphabet Inc (GOOG; GOOGL), ANGI Homeservices Inc (ANGI), Yelp Inc (YELP)

Highlights

With shares of Yelp (YELP) trading at $23 the day after announcing that furloughed employees will be returning to work on August 10th, the presenter sees a favorable risk/reward setup and is long. YELP has been on a “roller coaster” this year due to its exposure to SMBs in brick-and-mortar retail - restaurants in particular - and advertising. However, CEO Jeremy Stoppelman, who co-founded the company in 2004, is smart and wouldn’t likely be bringing 1k employees back on the books if business conditions weren’t improving. YELP has $7/share of cash on its balance sheet and no debt, and prior to COVID-19, margins were improving and after-tax FCF per share was ~$2.50. If the presenter’s read on the announcement is correct (i.e., that it’s a bullish signal), shares could re-rate to the high $20s or low $30s quickly.

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Idea Discussion

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