Yelp (YELP): Raising PT On Leverage From Larger Advertisers - Macquarie

September 7, 2016 8:25 AM EDT
Get Alerts YELP Hot Sheet
Price: $34.06 -1.22%

Rating Summary:
    19 Buy, 22 Hold, 5 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 11 | Down: 20 | New: 30
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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).

For an analyst ratings summary and ratings history on Yelp click here. For more ratings news on Yelp click here.

Shares of Yelp closed at $39.84 yesterday.

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