Analysts Rush to Upgrade Yelp After Blockbuster Q2 Earnings Report

yelp-logoOnline reviews platform Yelp Inc (NYSE:YELP) is receiving a lot of love from Wall Street analysts this morning, in reaction to its very upbeat second quarter earnings report publish last night.

We’ve seen at least six firms publish bullish commentary on YELP this morning, with more likely coming throughout the day. Here’s a summary thus far:

  • Axiom Capital upgraded YELP to Buy from Hold with a $44 target, suggesting a 33% upside. “Following an extremely challenging 2015, Yelp has outperformed firm’s/Street local advertising ests for two consecutive quarters, and mgmt raised FY16 rev and Adj. EBITDA guidance twice this year,” said the analyst. Axiom also praised the company’s increased local advertising revenues, lower than expected competition, and the potential for M&A interest for the positive view.
  • Mizuho Securities upgraded YELP to Buy and lifted its price target to $40 from $24. The firm pointed to stable local ad sales growth, better margins, easier comps, and new growth opportunities for the upgrade.
  • Raymond James upgraded YELP to Outperform.
  • Bank of America/Merrill Lynch upgraded YELP to Neutral.
  • Needham & Co says YELP should continue to outperform expectations due to upsell activity, product innovation and marketing efforts, and higher focus on client follow-up.
  • Wedbush Securities believes YELP will stay on top as the #1 platform for user-generated reviews and discovery of local businesses. While they maintained their Neutral rating, they feel that current valuation fully reflects its ongoing growth.

Yelp shares surged $4.13 (+12.65%) in premarket trading Wednesday to $36.77. The stock had already risen 13% year-to-date prior to last night’s earnings report.

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