Yelp (YELP) Decides to Temporarily Discontinue Search for a Buyer; Brean Capital Reiterates Buy

Brean Capital reiterates a Buy rating and $58.00 price target on Yelp (NYSE: YELP) following reports that it has decided temporarily not to find a buyer for the company. Analyst Tom Forte believes that shares of Yelp are worth a lot more than current levels and recommend investors purchase shares.

Forte commented, "Yelp operates the largest crowd-sourced local business directory
globally, with 77MM cumulative reviews (since its 2004-launch) and an audience of 142MM monthly users (as of 1Q15). According to an article published by Bloomberg last Thursday, the management of Yelp has decided, at least on a temporary basis, to discontinue its efforts to find a buyer for the company. Note, Yelp made no official statement on the matter. Investors responded to the article by pushing the shares down 10.0% on Thursday. As we suggested when the speculation started regarding the company potentially seeking a buyer (see our May 8th note, YELP: For Sale Or Not, Recommend Purchase of Shares) – for sale or not, we believe shares of Yelp are worth a lot more than current levels and recommend investors purchase shares. We
reiterate our Buy rating and 12-month price target of $58, which is based on our discounted cash flow analysis that assumes Yelp is able to achieve long-term adjusted EBITDA margin of 34.0%, compared with 18.8% in 2014."

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 $38.18 yesterday.

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