Yelp (YELP) PT Raised to $42 at Mizuho on Fundamentals, M&A Prospects

Mizuho Securities analyst Neil Doshi reiterated a Buy rating and boosted his price target on Yelp (NYSE: YELP) to $42.00 (from $40.00) given the strength in the firm's RAMP analysis, as well as Yelp's likelihood of being a potential M&A prospect.

"Given Yelp’s ranking in our RAMP analysis, and the potential for an acquisition, we are increasing our PT from $40 to $42 as we increase our EV/EBITDA multiple from 18x to 19.5x," the analyst said.

Doshi sees Apple (NASDAQ: AAPL) or Google (NASDAQ: GOOGL) as potential acquirers.

"While Yelp was formally for sale in 2015, we believe that stability in the business, improved mobile user growth, and new local ad products should help drive improved revenue growth," he said. "Furthermore, Yelp is the dominant category leader in local advertising, and has one of the most recognized brands on the Internet for local business reviews and searches. We believe that Apple would not be a possible acquirer but it could do deeper integrations with Yelp and Apple’s iOS. Google could buy Yelp and integrate its reviews into local-based queries and maps, and can drive additional advertising synergies."

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 $36.90 yesterday.

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