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Yelp - AI Stock Analysis
Analysis generated March 13, 2025
Yelp Inc. operates a platform that connects people with local businesses. Founded in 2004, the company provides user-generated reviews and ratings for various services, including dining, shopping, and entertainment. Yelp's business model is primarily driven by advertising revenue from businesses looking to attract more customers.
Fundamental Analysis
Yelp posted a revenue of $364 million for the last quarter, a 0.96% increase compared to the previous quarter, signaling slight growth. Year over year, revenue rose by 4.42%, which demonstrates consistent upward momentum. However, net income for the last quarter was $38 million, showing a minor 1.06% improvement from the previous quarter but a worrying 33.97% decline year over year. EBITDA for the last quarter was $47 million, indicating a robust 16.95% growth compared to the prior quarter and an 11.33% year-over-year increase, suggesting efficient cost management and potentially higher profitability in the long run.
Yelp's Price-to-Earnings (P/E) ratio is currently 18.7, reflecting a valuation that appears reasonable. Nonetheless, recent insider selling could be a bearish signal, hinting that company insiders might not be optimistic about the company's future performance.
Technical Analysis
The current stock price is $34.01, representing a decrease of 16.13% over the past month and a 10.19% decline over the year. While this downward trend could be alarming, the overall technical trend for Yelp is bullish, as indicated by the SMA10 (Simple Moving Average) of 34.60, slightly higher than the previous SMA10 of 34.56. However, the Relative Strength Index (RSI) is 72.2, indicating an overbought condition that could result in a short-term pullback.
Alternative Data Analysis
On the employment front, Yelp has 119 open positions, down 13% in the past few months, suggesting potential cost-cutting measures. This could be worrisome for a company aiming for growth. Furthermore, only 44% of Yelp employees hold a positive business outlook, which is quite concerning.
Customer acquisition data reveals that Yelp has about 126 million visitors to its webpage, with no significant changes recently. However, daily mobile app downloads have increased by 12% to 12,000, a bullish sign of growing customer base. In terms of customer engagement, Yelp's social media presence is stable but slightly declining. The company has 140,000 Instagram followers and 100,000 Twitter followers, with the latter showing a 1% decrease in the past couple of months.
Lastly, according to AltIndex’s AI score, Yelp has a score of 23, signifying a strong sell signal based on a comprehensive analysis combining fundamental, technical, and alternative data.
Conclusion
Yelp presents a mixed bag of signals, with some metrics pointing to modest growth and others suggesting potential issues. The revenue and EBITDA growth are encouraging; however, the sharp decline in net income year over year is troubling. The bullish short-term trend and increasing mobile app downloads are positives, but the overbought condition indicated by the RSI and the low employee sentiment are causes for concern. Given the AltIndex AI score of 23, which signals a strong sell, cautious investors might consider holding back or even selling Yelp stock in the immediate term.
Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.
