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On Jul 11, 2014, Zacks Investment Research upgraded Yelp Inc. (YELP - Snapshot Report) to a Zacks Rank #1 (Strong Buy). With a strong return of 89.5% over the past one year, improving outlook, mobile growth opportunity and a positive estimate revision trend, Yelp is an attractive investment opportunity.

Why the Upgrade?

Yelp is expected to benefit from strong growth in active local business accounts as well as improving mobile customer engagement. The company has diversified its revenue stream by offering new features such as the revenue estimator, Yelp platform and call-to-action.

Yelp has been continuously endeavoring to improve the mobile web experience for its users. In the first quarter, it launched a feature that enabled users to add photos via mobile web. In the reported quarter, Yelp had approximately 61.0 million mobile unique visitors (which includes both mobile web and mobile app users), up 52.0% on a year-over-year basis.

Approximately 35.0% of the new reviews were contributed through mobile devices. Almost 60.0% of all searches came from mobile in the quarter.

We remain encouraged by the company’s international expansion (Japan, Mexico, Argentina and Portugal in 2014) which in turn will boost ad revenues. Moreover, Yelp’s strategic partnerships with Yahoo! (YHOO - Analyst Report) and YP will further increase customer engagement. We believe that these international initiatives will drive top-line growth, going forward.

Positive Estimate Revisions

The Zacks Consensus Estimate for fiscal 2014 remained steady at a loss of 3 cents per share over the last 7 days. For fiscal 2015, the Zacks Consensus Estimate remained stable at earnings of 28 cents per share over the same period.

The long-term expected earnings growth rate for Yelp is 35.0%.

Other Stocks to Consider

Investors interested in technology stocks may consider TripAdvisor (TRIP - Snapshot Report) and Intel Corp (INTC - Analyst Report). Both the stocks sport a Zacks Rank #1.

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