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Website Traffic Predicts Yelp’s Q2 Beat; Shares Up 14%

Story Highlights

Robust advertising demand helped Yelp deliver record second-quarter revenue. Investors cheered the numbers in an after-market rally on Thursday.

Yelp (YELP) shares gained 14.5% during the extended trading session yesterday after the company delivered robust second-quarter numbers.

Impressively, our website traffic tool indicated this second quarter outperformance, with the total website traffic to Yelp globally and across devices ticking northward since Q4 2021. During Q2, the number of visits jumped nearly 15% as compared to the prior quarter, to 350.6 million. In comparison, the platform had 307.6 million total visits in the year-ago period.

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Q2 Beat & Updated Guidance

The top line reached an all-time record of $298.9 million, comfortably surpassing estimates by around 14.6 million. Earnings per share (EPS) at $0.11 outperformed expectations by $0.12. Impressively, this is the ninth straight earnings beat for Yelp.

David Schwarzbach, CFO of the online local business review platform, remarked, “We were particularly pleased by advertiser demand in our Services categories, which once again drove record Advertising revenue. With revenue from our Self-serve and Multi-location channels now comprising 49% of total Ad revenue, it’s clear our strategy is working.”

Buoyed by this advertising strength, the company also upped its full-year outlook and now expects net revenue to range between $1.18 billion and $1.20 billion. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) are projected to be between $265 million and $285 million.

Analysts’ Take

Wall Street, in the meantime, has a Hold consensus rating on the stock alongside a price target of $35.11, implying an 8.63% potential upside.

Closing Note

Yelp’s promising business model continues to make gains despite a challenging macro environment. Nonetheless, a beta of 1.46, a price-to-earnings ratio of 56.6, and a TipRanks smart score of 4 indicate the stock is not really inexpensive at current levels and may not outperform the broader market in the near term.

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