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Yelp Inc. YELP reported first-quarter 2021 net loss of 8 cents per share, beating the Zacks Consensus Estimate of a loss of 26 cents. Moreover, loss per share was narrower from the net loss per share of 22 cents reported in the year-ago quarter.
Revenues declined 7% year over year to $232 million but surpassed the Zacks Consensus Estimate of $228 million.
The year-over-year decline was primarily due to lower revenues from Restaurants, Retail and Other categories as a result of the COVID-19 pandemic-related shelter-in-place orders.
Nonetheless, strength in the Services categories, especially the Home Services business, led to an improved retention rate
Yelp Inc. Price, Consensus and EPS Surprise
Yelp Inc. price-consensus-eps-surprise-chart | Yelp Inc. Quote
Advertising revenues (95.7% of total revenues) declined 7.5% year over year to $222 million. The downside was caused by coronavirus-led reduction in advertising budgets by customers in the restaurants, retail and other categories. However, paying advertising locations showed recovery trends during the quarter.
Within Advertising, Services revenues grew 6% year over year while Restaurants, Retail & Other revenues fell 24.3%.
Transaction revenues were $3.8 million in the first quarter of 2021, up 44% year over year due to increases in food take-out and delivery orders, particularly through Yelp’s partnership with Grubhub GRUB. This was a result of the coronavirus outbreak, which forced many restaurants to close for dine-in services and provide take-out and delivery services only.
Other service revenues fell 12% year over year to $6 million, primarily as a result of relief provided to customers in the form of waived fees.
App-unique devices improved 10.3% year over year to 32 million on a monthly average basis, as pandemic-related restrictions ease during the quarter.
Diners seated via Yelp rose 20% sequentially, while it declined 24% year over year.
Total costs and expenses declined 13% year over year to $240.7 million.
Yelp’s first-quarter adjusted EBITDA surged 159% year over year to $44 million. However, the adjusted EBITDA margin expanded from 7% in the year-ago quarter to 19% in the first quarter of 2021.
Balance Sheet & Cash Flow
As of Mar 31, 2021, Yelp’s cash, cash equivalents & restricted cash were $589.3 million, down from $596.5 million as of Dec 31, 2020.
Net cash flow from operating activities was $58.9 million compared with the previous quarter’s $48 million.
In the second quarter, the company expects to move from recovery to year-over-year growth. Yelp expects revenues between $240 million and $250 million.
Management plans to increase hiring in the second quarter, as a result of which, the second-quarter adjusted EBITDA is expected to be in the range of $35-$45 million.
The company raised its guidance for 2021. It now expects revenues between $1 billion and $1.02 billion, up from the previous range of $985 million-$1 billion. Adjusted EBITDA is now anticipated in the range of $175-$195 million, up from $150-$170 million
Zacks Rank and Other Stocks to Consider
Yelp currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader technology sector include Lam Research Corporation LRCX and LG Display Co., Ltd. LPL, each sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Lam Research and LG Display is currently projected at 32.8% and 29.8%, respectively.
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Yelp Inc. (YELP) : Free Stock Analysis Report
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