Stock analysis · Bull Rankings model

YELP analysis

Yelp Inc.Internet Content & Information. Scored on the same transparent 7-signal model behind the daily rankings.

YELP
Yelp Inc. · Internet Content & Information
FCF$281mC
Rev+2.1%C
D/E0.25A-
P/E12.6xA-
PEG0.57A-
80.5Score
$27.39$1.5B
1Y Target$26.71Analyst consensus · 7 analysts
5Y Target$33.73Compound horizon
10Y Target$43.25Long-dated conviction
FCF$281mTTM
C
FCF $281m — modest; watch for margin expansion
Rev+2.1%TTM YoY
C
Revenue +2.1% — flat, mature phase or headwinds present
D/E0.25
A-
D/E 0.25 — less debt than most Communication Services peers (≈25th pctile)
P/E12.6x
A-
P/E 12.6 — cheaper than most Communication Services peers (≈25th pctile)
PEG0.57
A-
PEG 0.57 — strong; Lynch's preferred zone

Forward price target — the 1-year figure is the analyst consensus where the stock is covered; the 5- and 10-year figures compound our earnings estimate from there. The DCF below is a separate cross-check on intrinsic value (what it's worth today), not another target.

Quality-growth score · 80.5
Quality0.88
Growth0.66
Value0.90
Why this score
  • Buying back stock
Entry · Margin of safety
52-week rangeMid-range
23% off the 12-month high
vs DCF fair value71% belowest. fair value ~$94
What the price assumes: free cash flow compounding at ~-21% a year for the next decade — vs the ~13% a year our model projects from current growth and analyst estimates.
Quality signals · context only
Gross profitability134% · Agross profit ÷ total assets (Novy-Marx)
ROIC22.2% · Areturn on invested capital — not score-weighted
Why now
Yelp’s paid advertising suite—especially Yelp Connect and multi‑location CPC ads—locks local merchants into a high‑margin, recurring spend model, driving a free‑cash‑flow haul of $281 m on a $1.5 b market cap and a rock‑solid PE of 12.6×. Coupled with a healthy ROE of 22% and a modest profit margin of 9.5%, the business can reinvest cash into buybacks while still expanding its ad footprint. The thesis rests on the durability of local search spend and the ability to compound that cash flow at a steady rate.
Moat
Yelp’s moat lives in its entrenched local‑business network: merchants rely on Yelp listings and the Yelp Connect channel to reach nearby consumers, creating switching costs tied to search relevance and review credibility. This platform enables Yelp to charge premium CPC rates, fueling the 22% ROE that stems from pricing power in the local advertising niche—a lever competitors can’t replicate quickly without comparable review ecosystems.
Risk
The growth pillar is the weakest link, with revenue climbing a tepid 2.1% YoY and the Bull Rankings model flagging a reverse‑DCF implied free‑cash‑flow contraction of –21% annually—far below the modest top‑line growth, suggesting the current price bakes in unrealistic optimism. A slowdown in local ad spend or a shift to alternative discovery platforms would validate this risk, pulling the stock toward its 52‑week low of $19.60.
Horizon
1-3 yr $26.71 (7-analyst consensus) — multiple re-rating thesis requires a catalyst. 5 yr $33.73 at ~4% CAGR — dividend + buyback compounding. 10 yr $43.25 if the moat survives secular pressure.
Not investment advice. The Bull Rankings publishes a quantitative ranking model and accompanying analysis for general informational purposes only. Nothing on this page is a recommendation to buy, sell, or hold any security; nothing is personalized to your circumstances, risk tolerance, or tax situation. Investing carries the risk of loss — invest at your own risk and consider consulting a licensed financial professional before acting on anything you read here. See terms and methodology for full disclosures.
Trend
-1.9 over 7 daily scores
From 82.4 (Jun 22) → 80.5 (now)

One point per daily model run. The range autoscales, so a flat-looking line can still hide 1–2 point moves — read the From → To values for the actual range.

Shares to buy
73
Position size
$1,999
4.0% of portfolio
Stop price
$20.54
25% below $27.39
$ at risk if stopped
$499.87
budget $500.00 · 1% of portfolio

Math only — share count is floor(portfolio × risk% ÷ (price × stop%)). Doesn't account for commissions, slippage, gap risk, or position-correlation across your book. Inputs persist locally; never sent to the server. Not investment advice.

Yelp Inc. (YELP): score, valuation & FAQ

Yelp Inc. (YELP) is a Internet Content & Information company that scores 80.5 out of 100 on the Bull Rankings quality-growth model — a strong reading. The score blends three pillars — quality (durable returns, healthy margins, low leverage), growth (revenue and earnings), and value (valuation versus sector peers) — into one number, refreshed daily; it is a screen, not a buy recommendation.

Its strongest graded signals are D/E (A-), P/E (A-) and PEG (A-). On valuation, YELP sits about 71% below our discounted-cash-flow fair value (a margin of safety) — the current price implies roughly -21% annual free-cash-flow growth over the next decade.

Is YELP a good stock to buy?

Bull Rankings scores YELP 80.5 out of 100 on its quality-growth model, which is a strong reading. That is driven by D/E (A-), P/E (A-) and PEG (A-). A score is a quantitative screen of Yelp Inc.'s fundamentals, not personalised financial advice — weigh it against your own time horizon and risk tolerance, and read the risk factors below before acting.

Why does YELP score 80.5 on Bull Rankings?

The quality-growth score blends three pillars — quality (returns on capital, margins, leverage, earnings quality), growth (revenue and earnings expansion), and value (valuation versus sector peers). YELP earns its highest marks on D/E (A-), P/E (A-) and PEG (A-). Each pillar is graded against sector-aware thresholds, then combined into the single 0–100 score.

Is YELP overvalued or undervalued?

Based on $27.39, YELP sits about 71% below our discounted-cash-flow fair value (a margin of safety) — the current price implies roughly -21% annual free-cash-flow growth over the next decade. It trades at a 12.6x× P/E (graded A-). Discounted-cash-flow estimates are sensitive to growth and discount-rate assumptions, so treat this as a cross-check, not a price target.

What are the main risks of investing in YELP?

The growth pillar is the weakest link, with revenue climbing a tepid 2.1% YoY and the Bull Rankings model flagging a reverse‑DCF implied free‑cash‑flow contraction of –21% annually—far below the modest top‑line growth, suggesting the current price bakes in unrealistic optimism. A slowdown in local ad spend or a shift to alternative discovery platforms would validate this risk, pulling the stock toward its 52‑week low of $19.60.

New to these metrics? The guides explain free cash flow, how the score works, and more in the learn hub — or run another name through the screener.

Bull Rankings is an automated fundamentals screen for research and education. It is not investment advice, and nothing here is a recommendation to buy or sell any security. Do your own research and consider consulting a licensed financial adviser.

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