Buy Yelp (YELP) With or Without Sale, Brean Capital Says; Lists 10 Potential Suitors

Brean Capital analyst Tom Forte reiterated a Buy rating and $58 price target on Yelp (NYSE: YELP) saying they recommend buying the stock if it is for sale or not.

Forte comments, "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 published reports by The Wall Street Journal and Bloomberg on Thursday, the company is considering selling itself. Without debating the legitimacy of the speculation, in this note we wanted to offer a list of 10 potential buyers for the company: Alibaba, Amazon.com, Apple, Facebook, Google, Groupon, Microsoft, Priceline, Rakuten, and Yahoo!. Regardless of the legitimacy of the speculation, we believe shares of Yelp are worth materially higher than they are currently trading at and recommend investors purchases shares with the potential of a sale as a catalyst for the stock. 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 $47.01 yesterday.

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