YELP YAHOO FINANCE FULL

This puts the company's valuation at just 6.2x EV/FY22 adjusted EBITDA. Yelp updated outlook (Yelp Q3 shareholder letter) After we net off the $421.8 million of cash on Yelp's most recent balance sheet, the company's resulting enterprise value is $1.69 billion.įor FY22, Yelp has guided to adjusted EBITDA of $265-$275 million (the same midpoint, but a tighter range, versus a prior outlook of $260-$280 million). At current share prices near $30, Yelp has a market cap of $2.11 billion. Buyback boost - Yelp's board recently authorized an additional $250 million of buybacks, bringing its total open authorization to $332 million (which, at Yelp's current market cap, covers more than 15% of its outstanding shares).The hiring of a distributed workforce, and in locations other than the Bay Area, will bring personnel cost benefits on top of these real estate savings. Reducing and shifting real estate footprint - More to the point above: by shifting to a primarily remote-work policy and shuttering offices in large metro areas, Yelp estimates that its savings on real estate alone will drive $9.5-$11.5 million in annual savings, which isn't a small amount for a company generating just over $1 billion in annual revenue.The company considered this move as part of a broader push (even before the pandemic) to cut down its Local (small business-focused) sales teams, hire more Enterprise-facing account executives, and shift staff away from its San Francisco headquarters and to geographically cheaper locales. The impacts of the pandemic won't last, but Yelp's cost cuts will - Yelp was an early reactor to the pandemic and aggressively laid off/furloughed a large portion of its sales team.Sales strategy shift has not impacted account growth - Yelp continues to grow its paid advertiser accounts at a healthy pace thanks to the success of its self-service channel, and average spend per account is also gliding upward.Yelp is reshaping its sales teams to cut down on account executives focused on lower-dollar customers (the Local sales headcount is at 50% of pre-pandemic levels) and is instead hiring much higher-ROI salespeople focused on enterprise customers. These deep-pocketed advertisers benefit from reaching consumers on a platform known for its truthful and useful reviews, and Yelp benefits from having high-contribution recurring clients. Focus on multi-location customers - In other words, Yelp is shifting away from its traditional stronghold of focusing on local businesses and restaurants and going after large, multi-location national chains.

YELP YAHOO FINANCE FULL

Here's a full rundown of the bullish thesis for Yelp: When I take a step back and assess Yelp, I still find it to have a significant moat in the consumer business/digital advertising space, and remain bullish, especially owing to its low valuation. To me, Yelp is affected by the same macro conditions that every other company in the market is facing, and we shouldn't judge the merit of the stock based on a potential temporary slowdown. So, in spite of a relatively strong Q3 earnings print, shares of Yelp crashed more than 15% due to the company's relatively bearish tone for Q4.Īs usual, the market is taking an incredibly short-sighted view. In particular, Yelp is anticipating that demand from its advertisers, particularly the multi-location/franchise clients that Yelp has worked hard to target over the past few years, will slow down as they re-assess their ad budgets. Like virtually every other company in the market at the moment, it's dealing with unprecedented macro headwinds and impending recession fears. Yelp, as many are probably aware, has made itself the premier review site for restaurants as well as local small businesses. In the absence of clarity, I think that one future-proof move is to invest in beaten-down, value-oriented tech stocks, and I can think of a few names as appealing as Yelp ( NYSE: YELP ).

Adamkaz/iStock Unreleased via Getty ImagesĪs we head into the final stretch of 2022, one thing is clear: the market seems to have no clear direction.

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