Yelp (YELP): Raising PT On Leverage From Larger Advertisers - Macquarie
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Macquarie analyst, Tom White, reiterated his Outperform rating on shares of Yelp (NYSE: YELP) and believes that multilocation advertisers are a promising potential driver of ARPA growth and operating leverage. National/multi-location advertisers tend to manage larger budgets than SMBs, are more sophisticated about online advertising and estimating ROI and churn less often.
The analyst stated "We estimate monthly ARPA for YELP’s National/multi-location accounts is ~$1,200 (but with a wide range), ~7x our ARPA ests for YELP’s core SMB advertising + self-service channels. Investments in specialized ad products, functionality, and sales teams should expand YELP’s low-single digit (fractional, in some cases) “wallet share” at these customers and drive new account growth."
The increased opportunity drives the price target to $46 (from $39).
Shares of Yelp closed at $39.84 yesterday.
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