What’s New With Yelp’s Stock?
Yelp’s stock (NASDAQ: YELP), an online site for discovering local businesses ranging from bars, restaurants, and cafes, to hairdressers, spas, and gas stations – is down 16% in the last month to around $34, underperforming the S&P 500 index’s 3% decline. Yelp’s Q4 results beat expectations, with net revenue rising 6% year-over-year (y-o-y) to $362 million, and earnings per share surging to $0.62 (up 68% y-o-y), outpacing the $0.53 forecast. However, the company issued cautious guidance for 2025 citing macroeconomic uncertainties and ongoing operating challenges for businesses in the restaurants, retail, and other (RR&O) categories. Also see Tripadvisor’s Stock Down 30%, What’s Next?. Separately, with increased uncertainty and volatility, see Inflation to Sink S&P 500, Brace For Impact?
For 2025, Yelp projects net revenue between $1.470 billion and $1.485 billion (compared to $1.41 billion in FY 2024) and adjusted EBITDA in the range of $345 million to $360 million (vs $358 million in FY’24). Yelp’s outlook focuses on high-margin opportunities in services advertising and AI-driven enhancements amidst macroeconomic and competitive challenges. If you want upside with a smoother ride than an individual stock, consider the High Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.
Yelp’s 2024 performance was marked by a 6% y-o-y increase in net revenue, driven primarily by a 6% growth in advertising revenues. The Services segment was a key contributor, achieving an 11% y-o-y growth in advertising revenue, which reached $879 million. This growth underscores the segment’s vital role within Yelp’s business structure. Also, Yelp strengthened its foothold in the auto services advertising vertical through the strategic acquisition of RepairPal for $80 million in Q4, positioning itself for incremental revenue growth. However, the RR&O categories faced challenges, resulting in a 3% decline in advertising revenue to $470 million, attributed to ongoing economic pressures, shifting consumer spending patterns, and competitive dynamics from delivery service platforms.
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Yelp achieved notable successes, including a 6% y-o-y growth in ad clicks and a 39% y-o-y growth in EPS to $1.88 during the full year. Additionally, adjusted EBITDA increased by 8% y-o-y to a record $358 million. However, the company experienced a 5% decline in total paying advertising locations, primarily due to the decline in RR&O categories.
We forecast Yelp’s Revenues to be $1.5 billion for the fiscal year 2025, up 5% y-o-y. Given the changes to our revenues and EPS forecast, we have revised Yelp’s Valuation to $36 per share, based on a $2.28 expected EPS and a 15.7x P/E multiple for the fiscal year 2025, almost in line with the current market price (March 3).
Overall, the performance of YELP stock with respect to the index over the last 4-year period has been quite volatile. Returns for the stock were 11% in 2021, -25% in 2022, 73% in 2023, and -18% in 2024. The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, is considerably less volatile. And it has comfortably outperformed the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics.
It is helpful to see how its peers stack up. YELP Peers shows how Yelp compares against peers on metrics that matter. You will find other useful comparisons for companies across industries at Peer Comparisons.
| Returns | Mar 2025 MTD [1] |
2025 YTD [1] |
2017-25 Total [2] |
| YELP Return | -2% | -13% | -12% |
| S&P 500 Return | -2% | -1% | 161% |
| Trefis Reinforced Value Portfolio | -2% | -4% | 658% |
[1] Returns as of 3/4/2025
[2] Cumulative total returns since the end of 2016
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