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Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Yelp Inc. (NYSE:YELP) due to its excellent fundamentals in more than one area. YELP is a company with impressive financial health as well as a excellent future outlook. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Yelp here.
Flawless balance sheet with reasonable growth potential
Investors in search for stocks with room to flourish should look no further than YELP, with its expected earinngs growth of 21%, bolstered by its impressive cash-generating ability, as analysts predict its operating cash flows will rise by 71% over the same time period. This is a sustainable driver of high-quality earnings, as opposed to pure cost-cutting activities. YELP's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that YELP manages its cash and cost levels well, which is an important determinant of the company’s health. YELP currently has no debt on its balance sheet. This means it is running its business only on equity capital funding, which is rather impressive for a US$2.9b market cap company. Therefore the company has plenty of headroom to grow, and the ability to raise debt should it need to in the future.
For Yelp, I've put together three key aspects you should further examine:
- Historical Performance: What has YELP's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Valuation: What is YELP worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether YELP is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of YELP? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.