We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
YELP Q3 Earnings Beat: Will Weak Guidance Drag the Stock Down?
Read MoreHide Full Article
Yelp Inc. (YELP - Free Report) reported third-quarter 2024 earnings of 56 cents per share, beating the Zacks Consensus Estimate by 40%. The figure declined 29.1% year over year.
YELP’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 165.12%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
YELP’s revenues increased 4.4% year over year to $360.3 million but marginally missed the Zacks Consensus Estimate by 0.11%.
Following its lower-than-expected third-quarter revenue estimates, YELP lowered guidance for 2024. This raises concerns about the company’s near-term prospects, which might weigh on its share price performance. YELP shares lost nearly 3% in the pre-market trading. Shares of YELP have plunged 19.7% year to date, underperforming the Zacks Computer & Technology sector’s return of 28.5%.
Yelp’s advertising revenues (95.6% of total revenues) increased 4% year over year to $344 million, mainly driven by a rise in ad clicks and increasing cost per click. Our model estimate for Advertising revenues was pegged at $346.5 million.
Advertising revenues for the Services business grew 11% year over year to $228 million, driven mainly by strong demand from advertisers and a rise in paying advertising locations. The RR&O division decreased 6% year over year to $116.4 million. This decline in the segment was due to persistent macroeconomic headwinds that have further challenged restaurant and retail businesses, reducing demand for Yelp’s services in the RR&O category. Other revenues increased 5.6% to $16 million. Our model estimates for Services, RR&O and Other revenues were pegged at $232.2 million, $114.3 million and $15 million, respectively.
Paying Advertising Locations decreased 7% year over year to 524,000. Per our model, Paying Advertising Locations were pegged at 534,000.
Total costs and expenses increased 3.4% year over year to $313.7 million.
Yelp’s third-quarter adjusted EBITDA climbed 5% year over year to $101 million. The adjusted EBITDA margin remained flat year over year at 28%.
Balance Sheet & Cash Flow
As of Sept. 30, 2024, Yelp’s cash, cash equivalents and short-term marketable securities were $397 million without any debt.
The company generated an operating cash flow of $102.3 million and a free cash flow of $92.5 million in the third quarter.
Q4 and FY24 Guidance
For fourth-quarter 2024, Yelp anticipates revenues between $347 million and $352 million. Adjusted EBITDA is projected in the band of $84-$89 million.
For 2024, the company now anticipates revenues between $1.397 billion and $1.402 billion, down from the previous guidance of $1.410-$1.425 billion. The adjusted EBITDA is now expected in the range of $341-$346 million compared with the previous guidance of $325-$335 million.
Yelp’s Zacks Rank & Other Stocks to Consider
Yelp currently sports a Zacks Rank #1 (Strong Buy).
The consensus mark for Shopify’s 2024 earnings has been revised upward by 13 cents to $1.12 per share over the past 90 days, indicating a 51.31% year-over-year increase. The long-term expected earnings growth rate for the stock stands at 39.2%. Shares of SHOP have gained 2.7% in the year-to-date period.
The Zacks Consensus Estimate for ANET’s 2024 earnings has been revised upward by 4 cents to $8.28 per share in the past 30 days, indicating an increase of 16.28% on a year-over-year basis. It has a long-term earnings growth expectation of 15.3%. Shares of FTNT have jumped 40.8% in the year-to-date period.
The Zacks Consensus Estimate for CyberArk’s fiscal 2024 earnings has been revised upward by a penny to $2.30 per share in the past seven days, suggesting a year-over-year increase of 105.4%. It has a long-term earnings growth expectation of 33.4%. Shares of CYBR have plunged 21.3% in the year-to-date period.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
YELP Q3 Earnings Beat: Will Weak Guidance Drag the Stock Down?
Yelp Inc. (YELP - Free Report) reported third-quarter 2024 earnings of 56 cents per share, beating the Zacks Consensus Estimate by 40%. The figure declined 29.1% year over year.
YELP’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 165.12%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
YELP’s revenues increased 4.4% year over year to $360.3 million but marginally missed the Zacks Consensus Estimate by 0.11%.
Following its lower-than-expected third-quarter revenue estimates, YELP lowered guidance for 2024. This raises concerns about the company’s near-term prospects, which might weigh on its share price performance. YELP shares lost nearly 3% in the pre-market trading. Shares of YELP have plunged 19.7% year to date, underperforming the Zacks Computer & Technology sector’s return of 28.5%.
Yelp Inc. Price, Consensus and EPS Surprise
Yelp Inc. price-consensus-eps-surprise-chart | Yelp Inc. Quote
Quarter in Detail
Yelp’s advertising revenues (95.6% of total revenues) increased 4% year over year to $344 million, mainly driven by a rise in ad clicks and increasing cost per click. Our model estimate for Advertising revenues was pegged at $346.5 million.
Advertising revenues for the Services business grew 11% year over year to $228 million, driven mainly by strong demand from advertisers and a rise in paying advertising locations. The RR&O division decreased 6% year over year to $116.4 million. This decline in the segment was due to persistent macroeconomic headwinds that have further challenged restaurant and retail businesses, reducing demand for Yelp’s services in the RR&O category. Other revenues increased 5.6% to $16 million. Our model estimates for Services, RR&O and Other revenues were pegged at $232.2 million, $114.3 million and $15 million, respectively.
Paying Advertising Locations decreased 7% year over year to 524,000. Per our model, Paying Advertising Locations were pegged at 534,000.
Total costs and expenses increased 3.4% year over year to $313.7 million.
Yelp’s third-quarter adjusted EBITDA climbed 5% year over year to $101 million. The adjusted EBITDA margin remained flat year over year at 28%.
Balance Sheet & Cash Flow
As of Sept. 30, 2024, Yelp’s cash, cash equivalents and short-term marketable securities were $397 million without any debt.
The company generated an operating cash flow of $102.3 million and a free cash flow of $92.5 million in the third quarter.
Q4 and FY24 Guidance
For fourth-quarter 2024, Yelp anticipates revenues between $347 million and $352 million. Adjusted EBITDA is projected in the band of $84-$89 million.
For 2024, the company now anticipates revenues between $1.397 billion and $1.402 billion, down from the previous guidance of $1.410-$1.425 billion. The adjusted EBITDA is now expected in the range of $341-$346 million compared with the previous guidance of $325-$335 million.
Yelp’s Zacks Rank & Other Stocks to Consider
Yelp currently sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the broader technology sector are Shopify (SHOP - Free Report) , Arista Network (ANET - Free Report) and CyberArk (CYBR - Free Report) , each sporting a Zacks Rank #1 at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The consensus mark for Shopify’s 2024 earnings has been revised upward by 13 cents to $1.12 per share over the past 90 days, indicating a 51.31% year-over-year increase. The long-term expected earnings growth rate for the stock stands at 39.2%. Shares of SHOP have gained 2.7% in the year-to-date period.
The Zacks Consensus Estimate for ANET’s 2024 earnings has been revised upward by 4 cents to $8.28 per share in the past 30 days, indicating an increase of 16.28% on a year-over-year basis. It has a long-term earnings growth expectation of 15.3%. Shares of FTNT have jumped 40.8% in the year-to-date period.
The Zacks Consensus Estimate for CyberArk’s fiscal 2024 earnings has been revised upward by a penny to $2.30 per share in the past seven days, suggesting a year-over-year increase of 105.4%. It has a long-term earnings growth expectation of 33.4%. Shares of CYBR have plunged 21.3% in the year-to-date period.