23.34 0.00 (0.00%)
After hours: 4:15PM EDT
|Bid||23.31 x 800|
|Ask||23.50 x 1100|
|Day's Range||23.01 - 24.12|
|52 Week Range||12.89 - 39.37|
|Beta (5Y Monthly)||1.09|
|PE Ratio (TTM)||34.12|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
While President Trump's executive order Thursday on "preventing online censorship" is widely viewed as targeted toward social media platforms like Twitter, Facebook, Instagram and YouTube, all of which which were cited in the order, it could also pose an unintended threat to online travel and user review sites that are difficult to sue because of […]
THE NUMBER ONE What’s your favorite coronavirus comfort food that you’ve kept ordering for delivery, germophobia be damned? It probably depends on where you live. Yelp (YELP) had one of its data scientists mine the text of dish names being ordered on its app and review site since shelter-in-place orders began on March 16 to determine what Americans have been craving as the pandemic has upended life around the country.
(Bloomberg Opinion) -- Each stage of the pandemic revives the question of what is coming next, usually in a more disturbing context. The next major event, I am sorry to say, is the disappearance of what I call ghost capital. According to one estimate, about half of small businesses will be out of cash within a month, and many of them will close. The American economy has been living off the inheritance of its pre-Covid-19 past, and that cannot go on forever.Consider your local restaurants. I live in Northern Virginia, which is scattered with thousands of dining establishments of many different kinds. Many of them are currently open for takeout and delivery but not for sit-down dining. Even when they are allowed to welcome customers back inside, social distancing will mean they can’t serve nearly as many patrons as before.That’s the supply side. Demand for in-restaurant dining is likely to fall as well, though estimates vary. Since the average small business carries less than a month’s worth of liquid reserves, and the wait for a vaccine is likely to be at least a year, many restaurants will simply be unable to survive the shrinking of the market.I call these places ghost restaurants because they are still walking around, so to speak, visible to us and listed on Yelp, but not really alive and without much of a future.In a few months’ time, a significant number of these ghost enterprises will be gone. My drive around Northern Virginia, rather than being rich with culinary choice, will soon become fairly desolate — and the overall economic landscape will indeed be much emptier.What else in our current capital structure might qualify as “ghost”?We are still watching TV shows made before the pandemic, but the supply of new material is starting to run thin. South Korea and a few other nations are producing fresh content, but a lot of U.S. television programming is already looking to adapt to the new scarcity of programming content.My local dry cleaner is still in business, taking advantage of its previous market position. But even once the lockdown is fully lifted, fewer people will be going into work or to formal events. Demand to have suits pressed is way down, and soon enough that will translate into a far fewer dry cleaning shops.Many shopping malls — and peripheral businesses that rely on mall traffic — also will turn out to be ghost businesses.If you own a small business, you might be wondering whether you should stick around in a declining sector. But what exactly can you do? You’ve already signed a lease, you have a lot of money invested in equipment, and it is hardly possible to start up a new business in the meantime. So you wait, in the process contributing to an image of diverse commercial activity that does not quite correspond to the long-term picture.Another less visible effect is that fewer replacement firms and small businesses are on the way. Covid-19 aside, small businesses have a natural life cycle, with many of them disappearing once the owner retires. Such retirements are more likely now (not just because business is bad, but because being out on the floor involves a health risk). But how will new businesses arise to take their place? It is harder to meet new business partners, harder to line up financing, harder to identify qualified assistants and staff — and consumer spending is down, too.And while an all-but-certain death awaits some businesses, others can look forward to mere stagnation. If you are a 23-year-old entrepreneur, how easy will it be to build up the network of “soft ties” that will help you launch the next phase of your career?As many marginal businesses are going under, it is quite possible that the public-health situation will improve. Civic spaces will repopulate as commercial ones depopulate, giving urban landscapes a confusing feel. And because there will be fewer businesses to choose from, it will be all the harder for those remaining to enforce social distancing.Many Americans have been clamoring lately for more freedom, and those desires are understandable. But as they emerge from lockdown, they might well be disappointed to discover that, above all else, what people will be exercising is the freedom to go out of business.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tyler Cowen is a Bloomberg Opinion columnist. He is a professor of economics at George Mason University and writes for the blog Marginal Revolution. His books include "Big Business: A Love Letter to an American Anti-Hero."For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
White-collar workers aren’t immune from the coronavirus’ economic devastation. Job losses, pay cuts, and reduced hours are already hitting people with higher incomes—and the pain will likely get worse.
About a month ago, I outlined on InvestorPlace four big reasons why beaten-up Yelp (NASDAQ:YELP) stock was ready to rip higher.Source: Shutterstock At the time, YELP stock was at $18. Three weeks later, it had rallied more than 30% to $24.50, amid broad optimism regarding a gradual reopening of the U.S. economy and resumption of normal consumer activity.Then JMP Securities released a bearish note on Yelp in mid-May. In it, JMP said:InvestorPlace - Stock Market News, Stock Advice & Trading Tips"Yelp's traffic is tied to brick and mortar visits and in-person services and while we expect traffic to improve as the U.S. removes COVID-19 related restrictions, Yelp is likely to see headwinds until we have a vaccine or treatment."YELP stock dropped big on the news. All the way back to $19.And I think it's time to buy the dip again. Yes, Yelp will see headwinds until we have a vaccine or treatment. But that's already fully priced into the stock. What's not priced in is the fact that the company's financial trends will only get better from here as the U.S. economy normalizes. As that happens over the next few months, YELP stock will bounce back.By a lot. Shares could even roar 75% higher by the end of the year.Here's how. Things Will Get BetterYelp's fundamentals are awful right now. There's little argument there. Consumers are rarely leaving their homes. Restaurants and local services across the globe are closed. Ad budgets have been slashed.Right now, Yelp is being hit by a cocktail of headwinds. And the numbers reflect this. Yelp's revenues in April dropped 35% year-over-year. * 20 Stocks to Buy If You're Still Betting on America to ThriveBut this feels like rock bottom for Yelp.Several states, including Georgia and Arizona, have let their stay-at-home orders expire. In those states, consumers are starting to go out again. Restaurants and local services are starting to open up. Presumably, this gradual economic normalization will lead to increased local ad spending in those states.So, whereas everything was working against Yelp in April, some of the company's headwinds have started to reverse course in May in certain geographies. In June and July, more states will let their stay-at-home orders expire. As they do, restaurant and local service traffic and spend will rebound in those states, and Yelp's fundamentals will continue to improve, slowly but surely.Big picture: things are bad right now for Yelp, but they are in the first inning of getting better. Over the next few months, the company's fundamentals will dramatically improve amid global economic normalization and the reopening of local restaurants and services. Huge Upside PotentialThe attractive thing about YELP stock at $18 is that all the bad news is priced in, but none of the good news is priced in.YELP stock trades at 1.6 times trailing sales. That's an all-time low valuation for this stock. More than that, it represents a 60% discount to the stock's five-year-average trailing sales multiple of 3.8.Assuming Yelp's revenue and profit growth trends do eventually normalize, then the stock is an absolute steal here at today's majorly discounted valuation.My modeling on Yelp is quite conservative. I assume a big revenue drop this year, and then mild, mid-single-digit revenue growth thereafter for the subsequent few years. I also assume a big drop in profit margins this year, followed by a gradual rebound in margins to 2019 levels by 2025.Those aren't wildly aggressive assumptions. If anything, they are quite conservative. Yet, they lay the groundwork for YELP stock to rally 75% over the next few quarters.Under those assumptions, I see Yelp netting about $2.30 in earnings per share by 2025. Based on a 20-times forward earnings, which is about the medium-term average multiple for technology stocks, and a 10% annual discount rate, that implies a 2020 price target for YELP stock of over $31. Bottom Line on YELP StockYelp stock is oversold and undervalued at current levels. All the bad news is priced in. None of the good news is priced in. Over the next few months, the good news will start to pile up.The economy will normalize. Local restaurants and services will reopen. Yelp's growth trends will improve.All of that good news will converge on a severely discounted valuation on YELP stock and spark a huge rally into the end of the year. I see prices above $30 as likely by the end of the 2020.Luke Lango is a Markets Analyst for InvestorPlace. He has been professionally analyzing stocks for several years, previously working at various hedge funds and currently running his own investment fund in San Diego. A Caltech graduate, Luke has consistently been rated one of the world's top stock pickers by various other analysts and platforms, and has developed a reputation for leveraging his technology background to identify growth stocks that deliver outstanding returns. Luke is also the founder of Fantastic, a social discovery company backed by an LA-based internet venture firm. As of this writing, he was long YELP. More From InvestorPlace * Top Stock Picker Reveals His Next 1,000% Winner * America's Richest ZIP Code Holds Shocking Secret * 1 Under-the-Radar 5G Stock to Buy Now * The 1 Stock All Retirees Must Own The post Buy the Big Dip in Yelp Stock For 75% Upside Potential appeared first on InvestorPlace.
Shares of Yelp Inc. are down more than 4% in Monday trading after BMO Capital Markets analyst Daniel Salmon downgraded the stock to market perform from outperform. "We felt there were no 'silver linings' in the results that could help offset the challenging environment in the local ad market ahead, which is clouding the transition to self-service/multi-location over the next 12 months, particularly in the restaurant vertical," Salmon wrote. "And while we understand the decision to pause share buybacks, capital return had been an important part of our thesis as well." He lowered his price target on the shares to $26 from $33. Yelp's stock has dropped 26% as the S&P 500 has fallen 12% in that span.
Yelp shares are lower after BMO Capital downgraded the company to market perform on a "challenging environment" in the local ad market ahead.
Image source: The Motley Fool. Yelp Inc (NYSE: YELP)Q1 2020 Earnings CallMay 7, 2020, 5:00 p.m. ETContents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks: OperatorGood day, and welcome to the Yelp First Quarter 2020 Earnings Conference Call.
Yahoo Finance's Heidi Chung breaks down why some investors are still optimistic on Yelp, despite a widening loss in its first quarter earnings report.
Yelp (YELP) delivered earnings and revenue surprises of -144.44% and 5.80%, respectively, for the quarter ended March 2020. Do the numbers hold clues to what lies ahead for the stock?
Yelp (NYSE: YELP) reported quarterly losses of 22 cents per share on Thursday, which missed the analyst consensus estimate by 14 cents.The company reported quarterly sales of $249.901 million, which beat the analyst consensus estimate of $230.760 million by 8.29%. This is a 5.92% increase over sales of $235.942 million the same period last year."The emergence of the COVID-19 pandemic has drastically changed nearly all aspects of life and has significantly impacted local businesses and their ability to operate as they once did," said CEO Jeremy Stoppelman. "Our first quarter results demonstrate the strength of our strategy, as we grew Revenue 6% compared to the first quarter of 2019, despite the emergence of the COVID-19 pandemic in March."Stoppelman says while there is no way of knowing how long this pandemic will last, the company is encouraged by the early signs of stabilization in the business witnessed in the second half of April.View more earnings on YELPYelp shares were trading down 6% to $21.50 in Thursday's after-hours session. The stock has a 52-week range between $40.79 and $12.88.Related Links:Yelp Reports Q4 Earnings Miss, Announces New CFOWSJ: Groupon Eyeing M&A, Yelp Could Be The TargetSee more from Benzinga * Elon Musk Talks Neuralink, Brain Stimulation And AI With Joe Rogan * Why Salesforce's Stock Is Trading Higher Today * Why Dynatrace's Stock Is Trading Higher Today(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Yelp Inc. shares fell 1.3% in the extended session Thursday after the company topped revenue estimates but reported wider-than-expected losses. The company reported a first-quarter net loss of $15.5 million, which amounts to 22 cents a share, versus net income of $1.4 million, or 2 cents a share, in the year-ago quarter. Revenue rose to $249.9 million from $235.9 million. Analysts surveyed by FactSet had estimated a loss of 9 cents a share on sales of $229.8 million. "Our first quarter results demonstrate the strength of our strategy, as we grew revenue 6% compared to the first quarter of 2019, despite the emergence of the COVID-19 pandemic in March," Chief Executive Jeremy Stoppelman said in a statement. "While there is no way of knowing how long this pandemic will last, we are encouraged by the early signs of stabilization in the business that we witnessed in the second half of April." For the second quarter, analysts model a loss of 32 cents a share and sales of $156.8 million. In April, Yelp pulled its 2020 guidance because of the pandemic and disclosed that it expects between $8 million and $10 million in costs related to the furloughing and termination of employees; the company said it was laying off 1,100 people and furloughing 1,100. Yelp stock has dropped 43% in the past year, with the S&P 500 index falling 1.2%.
As businesses struggle to reinvent themselves in the midst of the COVID-19 pandemic, Yelp is launching new features to help highlight these changes. For one thing, it's adding a new information category called virtual service offerings, which will allow businesses to showcase the fact that they're providing things like virtual consultations, classes, tours and performances. Then anyone browsing Yelp can search for those categories.
One of the easier-to-spot market themes right now is the widening performance gap between large and small companies. While many behemoths are rapidly reclaiming lost ground, there are a growing number of little guys that remain, well, lost. Today we're looking at four such stragglers that are top stocks to sell.To see this trend, you can compare two of the Street's favorite Indexes: The Russell 2000 and Nasdaq-100. The former will be your proxy for small-caps, and the latter will represent large-caps. While you could use the S&P 500, the biggest gainers are coming from the technology sector, which makes the Nasdaq-100 a more appropriate ticker. Its strength provides a more stark contrast to the Russell's depressing drift.The story for why small-caps find themselves losing ground in the recovery game is simple. They are the most vulnerable to an economic downturn due to their higher debt loads, dwindling cash balances, and lower credit ratings. These are all fundamental factors that cause investors to look more warily on small companies during challenging climates. And given the Covid-19 horror show that is wreaking havoc on Main Street, now seems like a perfect time for investors to shun higher-risk companies.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMy list of stocks to sell contains numerous tickers, but here are four of the top picks: * iShares Russell 2000 Index ETF (NYSEARCA:IWM) * SeaWorld Entertainment (NYSE:SEAS) * KB Home (NYSE:KBH) * Yelp (NYSE:YELP) * 9 Asian Stocks to Buy for a Post-Coronavirus Recovery Let's explore the narrative behind their poor performance and why their price charts are flashing warning signs. Small-Cap Stocks to Sell: iShares Russell 2000 Index ETF (IWM)Source: The thinkorswim® platform from TD Ameritrade The easiest path to betting against small-caps is to short the iShares Russell 2000 Index ETF. It allows you to sidestep picking specific stocks and instead set yourself up to profit from the continued demise of the entire space. IWM's rebound has returned the fund to the scene of its significant support break.If the principle of polarity holds, this old floor will become a new ceiling. And that makes entering bearish trades against the $126 resistance area an attractive proposition. Instead of shorting stock or buying expensive puts, I like using bear put spreads. By keeping the cost low enough, we don't need to use a stop loss if the trade sours.The Trade: Buy the June $110/$105 put spread for around $1.25. SeaWorld Entertainment (SEAS)Source: The thinkorswim® platform from TD Ameritrade The social distancing trend has destroyed SeaWorld's stock price. And it has largely sat out the market recovery. Sure, the initial oversold snapback was glorious. SEAS ramped 171% over five trading sessions. But the gains quickly fizzled, and with Thursday's 11% decline, the stock is one wave away from revisiting its lows.At a minimum, we'd need to see a push back above $13 resistance to reverse the short-term trend higher. It would mark a change in character and merit reassessing my pessimism. Until then, it's game on for bears. Watch for a break below the $8.50 support pivot before pulling the trigger. * 9 Robust Stocks to Buy to Survive a Bear Market The Trade: Buy June $9/$6 bear puts for around $1. KB Home (KBH)Source: The thinkorswim® platform from TD Ameritrade On the narrative front, I see a tug-of-war playing out with homebuilders. The bullish pull of low interest rates is up against the bearish forces of massive unemployment and banks raising borrowing standards. Cheap money means little when people are out of jobs, and banks are demanding customers bring big down payments and sterling credit.KB Home shares were demolished during the crash, falling 75% in less than a single month. Consider this an example for the ages of just how quickly the market can price in Armageddon. KBH has doubled off the lows but still looks vulnerable. It's below the 50-day and 200-day moving average, suggesting more work is needed before the trends turn.Watch for a break of this week's low ($19.15) as your trigger for the following play.The Trade: Buy the July $18/$14 bear put spread for around $1.50. Yelp (YELP)In scanning for stocks to sell, I focused on those that were quick to give back their gains after last month's snapback. Failing to make a higher pivot high on their second bounce attempt also signaled that sellers were still afoot. YELP stock has both characteristics and strikes me as still vulnerable.It's one of the worst looking tickers on my watchlist, and that makes it a natural choice for short trade ideas. This week saw the company's shares slip back below the 20-day moving average. A push above $23 resistance would make me reassess. Until then, I'm in the bear camp.The Trade: Buy the May $20/$15 bear put spread for around $2.For a free trial to the best trading community on the planet and Tyler's current home, click here! As of this writing, he held long-term bullish positions in IWM. More From InvestorPlace * America's 1 Stock Picker Reveals Next 1,000% Winner * 25 Stocks You Should Sell Immediately * 1 Under-the-Radar 5G Stock to Buy Now * The 1 Stock All Retirees Must Own The post 4 Struggling Small-Cap Stocks to Sell appeared first on InvestorPlace.
Quant fund D.E. Shaw is now the fourth-largest holder in each company. Blue Apron stock has soared in the face of the coronavirus pandemic, while Yelp stock has slumped.
Earnings season kicks off this week, and market watchers are preparing for the worst. The upcoming release of first quarter financial results is marred by historic levels of uncertainty, with worry looming over Wall Street as investors await a more detailed look at the extent of COVID-19's impact on profits.For those feeling lost in all of the stock market fog, investing gurus can offer a sense of clarity. No one more so than billionaire David Shaw, a former computer science professor at Columbia University. Since founding his investment firm, D.E. Shaw group, in a small New York City bookstore in 1988, he has grown the firm from six employees and $28 million in capital to an estimated $47 billion, with it delivering $25 billion to its investors as of the end of 2016. While most of D.E. Shaw’s day-to-day operations are now managed by the Executive Committee, Shaw still remains involved in higher-level strategic decisions.As for how Shaw was able to achieve this growth, he used algorithms and other quantitative techniques, pioneering the intersection of technology and finance. Thanks in part to his work, the quantitative revolution was born.Bearing this in mind, we used TipRanks’ database to get the data on two stocks Shaw’s firm snapped up recently. Let’s get started.Yelp Inc. (YELP)The crowd-sourced business review company has certainly had a rough going recently. As the COVID-19 pandemic is hitting it hard, Yelp announced that it will need to lay off and furlough workers in order to survive. In response to the news, shares sunk even lower, with the year-to-date loss currently landing at 44%.Having said that, Shaw viewed the recent weakness as a unique buying opportunity. According to an April 13 disclosure, D.E. Shaw bumped up its Yelp holding by 19.1%, adding 575,589 shares to be precise. This makes the firm a 5% owner of the company, with its total position coming in at 3,593,836 shares.Writing for Aegis Capital, five-star analyst Victor Anthony is cautiously optimistic. He doesn’t dispute the fact that it has earned a reputation as a “material under-performer," with the stock falling flat over the last three years. In addition, its fourth quarter results were disappointing as revenue, adjusted EBITDA and EPS all fell below estimates partly due to greater than expected seasonality in December.Anthony added, “Yelp's stock is facing an uphill battle to reward shareholders by relying on the core business alone, and that's in spite of the $681 million of share repurchases over the past ~2.5 years. It should be clear, that, for the stock to work, Yelp needs a transformative event.”As for this “transformative event”, Anthony suggests a merger with Groupon. He argues that such a merger would result in both revenue and cost synergies, as well as drive share price upside. Expounding on this, he stated, “Given the weak 4Q performance, underwhelming guidance versus our/consensus, lack of clear identifiable catalysts, and longer-term guidance on revenue and EBITDA margin that, in our view, are a stretch to achieve, it is hard to believe that the Board will continue to accept the share price underperformance. As such, we believe the Board will see no choice but to act to enhance the value of the stock beyond the new $250 million share repurchase.”To this end, Anthony decided to stay with the bulls, reiterating a Buy rating. Based on his $45 price target, the upside potential lands at a whopping 131%. (To watch Anthony’s track record, click here)What does the rest of the Street think about Yelp’s long-term growth prospects? The stock has received 3 Buy ratings, 11 Holds and 2 Sells in the last three months, making the analyst consensus a Hold. However, the $28.92 average price target implies shares could climb 48% higher in the next twelve months. (See Yelp stock analysis on TipRanks)Blue Apron Holdings (APRN)Moving on to a completely different industry, Blue Apron delivers all of the ingredients needed to make home cooked meals in exactly the right proportions. As lockdowns in cities across the U.S. prevent people from eating out, it makes sense that the company has attracted significant attention. On top of this, it notched a 213% gain in the last month.Counting itself as one of APRN’s fans, D.E. Shaw acquired a new position in the company. Disclosed on April 6, Shaw’s firm bought up 424,863 shares, giving it a 5.2% stake in APRN.Meanwhile, Canaccord Genuity’s Maria Ripps isn’t quite as optimistic. During the fourth quarter, active customers decreased by 35,000 sequentially to 351,000, the seventh quarter in a row of net customer losses as it pulls back on marketing spending and shifts the focus to high affinity customers. While average revenue per customer increased 6% and orders per customer grew 7%, revenue dropped.Commenting on APRN’s lackluster performance, Ripps noted, “Blue Apron's Q4 results showed continued active customer and revenue declines, although several metrics, including average revenue per customer and orders per customer, showed some strength. To preserve financial resources, the company is closing down its previously downsized Arlington, TX fulfillment facility and consolidating its production volumes to its two larger facilities in Linden, NJ and Richmond, CA.”That’s not to say the news is all bad. The company upgraded its menu during Q4 by expanding its selection from eight to eleven recipes, with more than half of its recipes now being considered healthy. Not to mention APRN is strengthening its partnerships. Its Weight Watchers relationship now offers more flexibility, it added two diabetes-friendly recipes per week as part of its ADA collaboration and it will now work with Chef Seamus Mullen on healthy recipes. The company also just added a new standalone Meal Prep option.However, all of this wasn’t enough to convince Ripps to side with the bulls. She remains on the sidelines, maintaining a Hold recommendation and reducing the price target from $7 to $5. This new target implies 58% downside potential. (To watch Ripps’ track record, click here)Turning now to the rest of the Street, APRN’s Hold consensus rating breaks down into 2 Holds, which were assigned in the last three months. It should also be noted that the $11 average price target puts the downside potential at 8%. (See Blue Apronv stock analysis on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Alongside all of its digital advertising peers, shares of Yelp (NYSE:YELP) have crashed and burned over the past few weeks on fears that businesses will cut ad budgets significantly so long as the novel coronavirus pandemic keeps consumers locked up at home.Source: BigTunaOnline / Shutterstock.com Yelp stock, down 45% from its mid-February highs, has actually fared worse than most peers. That's because this company has disproportionately high exposure to the restaurant industry, local services and small-to-medium sized businesses. Those three groups are among the most at-risk groups during the pandemic. Therefore, these three types of businesses are almost certainly cutting back on things like ad spending on Yelp.Overall, it has been an ugly 2020 for Yelp -- and reasonably so.InvestorPlace - Stock Market News, Stock Advice & Trading TipsHowever, there's reason to believe that this ugly start to 2020, positions YELP stock to have an explosive comeback in the second half of the year. Specifically, there's four big reasons to believe that a huge rebound rally is in store:* The coronavirus pandemic appears to be "plateauing," and the economy could rebound in the second half of 2020. Daily reported cases of the coronavirus are dropping across Europe, and starting to flatten out in the U.S. This puts us on track to have near-zero Covid-19 transmission by May/June. Thereafter, there's enough stimulus in the pipeline to promote a gradual recovery in economic activity.* Pent-up consumer demand for physical experiences could turn into robust consumer discretionary spend on retail and restaurants. While consumers may not be quick to hop on a plane or book a cruise in the aftermath of the pandemic, they will have tremendous pent-up demand to "do things." One of the safer physical experiences for U.S. consumers is to frequent local businesses, like retail shops and restaurants.* Yelp has sufficient liquidity to weather second-quarter business weakness. With $466 million in cash on the balance sheet, no debt and working capital of roughly $400 million, Yelp's balance sheet is strong enough to withstand a few months of horrible business operations.* Yelp stock is very cheap. Even after revising my long-term growth estimates lower, I still see YELP stock finishing the year up around $40 -- making the stock look incredibly cheap at current levels. The Economy Will NormalizeThe coronavirus pandemic is tracking in the right direction, and ahead of schedule.That is, strict social distancing measures across Europe and the U.S. have "flattened the curve" and caused reported new cases to start dropping. This trend should persist. If it does, then the U.S. could hit near-zero local transmission of Covid-19 by late May or early June. * 7 Penny Stocks To Buy with Massive Upside Potential The economy will normalize thereafter, on the back of significant monetary and fiscal stimulus. Consumers will go back out and shop. Advertisers will re-up their budgets. And Yelp's growth trends -- which will be nothing short of awful in Q2 -- will recover meaningfully in the third and fourth quarters. Pent-Up Demand Will Boost Discretionary SpendingThere is tremendous pent-up demand right now from U.S. consumers to go out and "do things." This pent-up demand is simply what happens when you take 340 million consumers who are used to shopping and eating out regularly, and tell them they have to sit inside and watch Netflix (NASDAQ:NFLX) all day.Still, memories of the coronavirus pandemic will linger far after the pandemic itself dies out. As such, consumers are unlikely to act on that pent-up demand by engaging in higher-risk physical activities, like global travel or cruises.Instead, consumers will act on their pent-up demand by engaging in lower-risk physical activities, like going to restaurants, gyms and shopping malls. When they do those things, they often use Yelp to help them find the right local experience.As such, Yelp's engagement has a chance to increase significantly in the second-half of 2020. Such a pick-up in engagement will coincide with a pick-up in ad spending on the platform. Sufficient Liquidity to Weather the StormThere's no denying that Yelp's second quarter will be really bad. But, Yelp has sufficient liquidity to ride out an awful quarter.The balance sheet has $466 million in cash. There's no debt. Working capital is about $400 million. Those are pretty big numbers for a company that had total expenses of just $980 million last year.In other words, Yelp has enough liquidity to absorb a bad quarter, and sail through to the other side without risking insolvency or lasting damage. Yelp Stock Is Too CheapI've revised my long-term estimates on Yelp lower to account for coronavirus disruption in 2020. Still, I see this company growing revenues and profits at a mid-to-high, single-digit clip over the next several years (post 2020) thanks to improved ad platform capabilities and effectiveness.My 2025 earnings-per-share estimate for Yelp presently sits at $2.90. Based on a 20-times exit multiple and a 10% annual discount rate, that implies a 2020 price target for YELP stock of nearly $40.That's about double where YELP stock trades hands today. Bottom LineYelp is disproportionately exposed to the coronavirus pandemic thanks to its reliance on restaurants, local services and small-to-medium-sized businesses. But, down 45% from recent highs, YELP stock is fully priced for a disastrous second quarter.What YELP stock isn't priced for, is economic normalization and a few strong earnings reports in the back-half of 2020. It increasingly appears likely that those things will happen. If they do, then YELP stock could soar from here into the end of the year.Luke Lango is a Markets Analyst for InvestorPlace. He has been professionally analyzing stocks for several years, previously working at various hedge funds and currently running his own investment fund in San Diego. A Caltech graduate, Luke has consistently been rated one of the world's top stock pickers by various other analysts and platforms, and has developed a reputation for leveraging his technology background to identify growth stocks that deliver outstanding returns. Luke is also the founder of Fantastic, a social discovery company backed by an LA-based internet venture firm. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * America's 1 Stock Picker Reveals Next 1,000% Winner * 25 Stocks You Should Sell Immediately * 1 Under-the-Radar 5G Stock to Buy Now * The 1 Stock All Retirees Must Own The post 4 Big Reasons Yelp Stock Will Soar In the Back Half of 2020 appeared first on InvestorPlace.
San Francisco-based Yelp, whose business model is reliant on other small businesses, has seen its customer base decline during the COVID-19 shutdown.
Yelp co-founder and CEO Jeremy Stoppelman announced in an internal email that the company is going through difficult times. Yelp has to cut expenses, which means a large round of layoffs and some additional measures -- 1,000 employees have been laid off. According to an SEC filing, Yelp had 5,950 employees as of December 31, 2019.