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Yelp - AI Stock Analysis

Analysis generated May 14, 2024

Yelp is a leading platform that connects people with great local businesses. Founded in 2004, Yelp allows users to rate and review various businesses such as restaurants, service providers, and retailers. With a vast database of business information and user-generated content, Yelp helps consumers make informed decisions. It monetizes its platform through advertising products, primarily targeted to local businesses.

Fundamental Analysis

Revenue for the last quarter was $336M. This represents a decrease of 2.84% compared to the previous quarter, indicating a slight quarterly decline. However, the 6.41% increase compared to the same quarter last year suggests a positive year-over-year growth, a positive sign for long-term investors.

Net income for the last quarter was $14M. Although this figure shows a significant decrease of 48.35% compared to the previous quarter, which is concerning, the remarkable 1,301.53% increase compared to the same quarter last year indicates substantial year-over-year improvement. This substantial growth suggests that the company has improved its profitability dramatically, likely due to better cost management or improved margins.

The EBITDA for the last quarter was $17M, which is down 44.39% from the previous quarter but shows a massive year-over-year increase of 2,145.70%. This indicates that while there may be short-term operational challenges, the company has made significant strides in enhancing its core profitability in the long term.

The current P/E ratio of 23.43 appears to be within a normal range, suggesting that the stock is reasonably valued relative to its earnings. However, recent insider selling is a potentially bearish signal, as it may indicate a lack of confidence from within the company.

Technical Analysis

Today's stock price is $37.72, representing a decrease of 7.12% compared to a month ago, which could be concerning for short-term traders. However, the stock is up 23.39% compared to a year ago, which suggests a positive long-term trend.

The stock's current SMA (Simple Moving Average) for 10 days is 38.65, which is lower than the previous SMA10 of 38.88. This indicates a potential downward trend in price movement. Moreover, the RSI (Relative Strength Index) is currently at 74.5, indicating an overbought condition and a potential bearish signal.

Alternative Data Analysis

Yelp currently has 76 open positions, down by 22% in the last couple of months. This decline suggests the company might be trying to improve its margins or cut costs, which is not typically a good sign for a growing company. The business outlook among employees is neutral, further suggesting a cautious perspective within the company.

Yelp has an estimated 137M visitors to their webpage, down by 14% in the last couple of months. This decrease in visitors is worrisome as it may indicate a loss of customer interest. On a more positive note, Yelp sees about 14,000 users downloading their mobile apps daily, up by 12% in the last couple of months, suggesting a potential increase in customer engagement through mobile platforms.

On social media, Yelp has 140,000 followers on Instagram with no significant change, and 100,000 followers on Twitter, with no meaningful increase or decrease. This lack of growth in social media following indicates a stagnant level of interest among consumers. However, AltIndex’s AI score for Yelp is 53, which is a hold signal based on a comprehensive analysis of fundamental, technical, and alternative data.

Conclusion and Recommendation

Based on the comprehensive analysis, Yelp shows mixed signals. The company demonstrates significant year-over-year growth in revenue, net income, and EBITDA, indicating fundamental strength over the long term. However, the short-term daily and technical indicators suggest potential bearish movements, with a decline in stock price over the past month and concerning technical signals like a high RSI and declining SMA.

Alternative data points reveal a cautious outlook, with job postings down and web traffic decreasing. However, an increase in mobile app downloads does offer a silver lining, indicating possible growing customer engagement on mobile platforms.

Given the mixed signals, it would be prudent for investors to maintain a hold position on Yelp stock. While the company shows long-term promise and growth, short-term risks and bearish technical trends suggest caution. Investors should closely monitor future quarterly results and alternative data trends for any significant changes that could warrant a reevaluation.