Yelp (YELP) PT Lowered to $31 at Evercore ISI

Evercore ISI analyst Robert Coolbrith lowered the price target on Yelp (NYSE: YELP) to $31.00 (from $38.00) while maintaining a Outperform rating.

The analyst commented: "YELP reported a mixed Q4:25, as Q4 Revenue came in slightly above the Street while EBITDA beat by 4%, but Q1 and FY26 Revenue and EBITDA were guided below Street expectations despite the addition of the Hatch acquisition and the announcement of a new AI licensing deal with OpenAI, as core ad fundamentals remain weak (Services decel’ing to +LSD and RR&O down LDD Y/Y). Assuming Services ads can maintain the Q4 exit growth rate of +3% Y/Y over the course of FY26 and that AI licensing growth, the DoorDash delivery partnership and the addition of Hatch can combine to drive (at least) 60%+ Other revenue growth, we believe mgmt’s initial FY26 guide for flat Y/Y revenue embeds an expectation for RR&O ad revenue down approximately 15% Y/Y, which seems a bit conservative to us vs. RR&O down 12% Y/Y in Q4. FY26 outlook for ~13% Y/Y EBITDA decline (on transformation investments and higher mix of cash comp vs. SBC) and acquisition charges should hem in ’26 GAAP EPS (we now forecast $1.79) but we think a bottoming out of ads fundamentals, OpEx discipline, SBC restraint and continued share repurchases (authorization recently expanded by $500MM) should drive a 30%+ GAAP EPS rebound in FY27. We continue to see deep value and AI catalysts ahead, and maintain our Outperform rating, though we lower our price target to $31 (combination of 12x FY27 P/E and 6x FY27 EV/EBITDA) from $38 prior."

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