Truist Securities increased Yelp’s price target stating that the company has “balance sheet strength” to navigate its business through the coronavirus pandemic.
Truist Securities analyst Matthew Thornton raised the price target on Yelp (YELP) to $25 (9.7% upside potential) from $22 and reiterated a Hold rating. Thornton wrote in a note to investors on Friday that “he is turning slightly more positive on a pullback in the stock price following its Q2 results as the company has the balance sheet strength to weather COVID-19 and eventually resume buybacks.” However, he warns that “Yelp is facing headwinds from slow recovery at SMBs and sees the management’s long-term margin targets as optimistic.”
On Aug. 6, Yelp reported a 2Q loss per share of $0.33 compared with analysts’ expectations of a loss of $0.53 per share. Revenues of $169.03 million topped Street estimates of $152.6 million. The company said it ended 2Q with cash and cash equivalents of $527 million.
Yelp’s CEO Jeremy Stoppelman said, “Our second quarter results demonstrate the resilience of our business, in spite of the significant headwinds faced by local economies following the emergence of COVID-19.” He added that “Due to our disciplined actions on expenses, coupled with solid revenue performance, we added $35 million of Cash and cash equivalents to our balance sheet.”
Currently, Wall Street analysts are sidelined on the stock. The Hold consensus is based on 8 Holds, 2 Buys and 3 Sells. The average price target of $25.20 implies upside potential of about 11%. (See YELP stock analysis on TipRanks).
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