MKM Cuts PT on Yelp (YELP) to $65; Lower Monthly Uniques, Increase Spending Concern Investors

MKM cut its price target on Yelp (NYSE: YELP) from $86 down to $65 and affirms its Buy rating following Q4 results issued last week.

Analyst Rob Sanderson noted that Yelp reported revenue growth upside in the two oldest cohorts (our key metric), in-line account additions (a focus of the Street) and upside to revenue guidance (which has historically been conservative). However, a decline in unique visitors and a planned increase in marketing spending is a concern to investors.

Sanderson also adjusted some estimates: Our 2015 revenue forecast increases to $550mn and EBITDA is lowered by about $20mn to $109mn on increased marketing. We have moderated our 2020 earnings power scenario, now illustrating $2.3Bn in revenue and 45% operating margin. International contribution and brand advertising is lower in our revisions. We think YELP can earn $8.00 per share in this time-frame.

For an analyst ratings summary and ratings history on Yelp click here. For more ratings news on Yelp click here.

Yelp closed at $45.11 last Friday.

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