Yelp (YELP) PT Cut to $37 at SunTrust Robinson Humphrey; Keeps 'Buy'
SunTrust Robinson Humphrey analyst Robert Peck cut his price target on Yelp (NYSE: YELP) to $37.00 (from $52.00) following results but maintained a Buy on risk/reward and reset expectaions.
Peck commented, ". We have been wrong on YELP. Our thesis had been predicated on much better Local, Brand, Transaction, International, and margin growth. Further, we are unnerved by Chairman Levchin’s resignation and several other concerns detailed below. However, we wonder if risk/reward is more favorable here with sentiment dire and forecasts being slashed (we cut 2015/2016 revenue 3%/9% and EBITDA 27%/36%), making for a better setup to meet/beat going forward. Core Local is still a >$400m run-rate business growing >40% into ever easing comps and Eat24 is a >$35m run-rate business growing >70%. Further, we still view Yelp as an acquisition target at an EV of $1.8b (ex $0.2b in NOLs). Our year-end 2016 target goes to $37 (shares down at $27.95 after-hours) from $52 based on 15x 2017 EBITDA, spot in-line with the peer group median (n=20, see page 4) and equating to 3x EV/sales."
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Shares of Yelp closed at $33.51 yesterday.