Yelp (YELP) PT Raised to $28 at Needham & Company
Needham & Company analyst Kerry Rice reiterated a Buy rating and bumped his price target on Yelp (NYSE: YELP) to $28.00 (from $25.00) following solid Q1 results and guidance driven by local ad re-acceleration.
Rice commented, "Yelp reported 1Q16 revenue and EBITDA upside and raised its FY16 guidance. We believe increased advertising efforts, ramping sales productivity, and ad fulfillment upside bolstered Yelp’s prominent local advertising market position. While encouraged by the continued solid growth in mobile app usage, driving additional app usage could accelerate revenue growth given the 10x higher engagement and constant ARPU. Looking ahead, we believe the incremental advertising and uptick in sales headcount is beginning to be impactful and could drive Local Advertising revenue upside. We also expect leverage improvement given the higher revenue levels and lower 2H16 marketing spend. We believe the risk/reward on Yelp remains attractive given that shares trades at 1.9x our 2016 EV/Sales estimate."
The firm raised FY 2016 EPS from ($0.30) to ($0.19) and FY 2017 EPS was set at ($0.05).
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Shares of Yelp closed at $21.42 yesterday.