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Yelp Stock Spikes on Pacific Crest Upgrade, Sees Advantage Unmatched By Competitors

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Yelp Inc. (YELP - Free Report) closed up 1.94% to $33.37 on Tuesday with a key analyst upgrade. Pacific Crest, well known for their equity analysts, upgraded Yelp stock from “Sector Weight” to “Overweight” with a price target of $43.00.

Pacific Crest analysts say that Yelp’s ease and utility of their self-service product are “underappreciated,” and their competition is overly focused on. Self-serve is a platform Yelp offers which lets businesses manage their own advertising.

Analyst Brad Erickson of Pacific Crest says Yelp’s sentiment cannot be matched by competitors Google (GOOGL - Free Report) and Facebook . He is talking about how businesses feel that Yelp is the most effective way to reach consumers who are ready to decide where to eat or get a haircut.

The equity research team had conversations with 30 local ad customers. None of the 30 businesses looked to allocate their Yelp budget to Google because people who look up places on Google, at the end of the day, have “lower intent” to make purchases.

Additionally, Mr. Erickson’s “channel checks” show that Yelp is producing value for its customers, and is protected from big competitors like Facebook and Google. With that, he believes Yelp can effectively capture the $60 billion of local ad spending shifting online.

“Conversations with 30 local ad customers raised our conviction that Yelp is delivering value to its customers, while staying insulated from larger competitors like Google and Facebook. With over $60 billion of offline local ad spending shifting toward online, we believe Yelp remains well-positioned to capitalize on this,” wrote Mr. Erickson.

Analysts show 18 buy ratings, 13 hold ratings and 2 sell ratings for Yelp stock.

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