Northland Capital Markets Downgrades Yelp (YELP) to Underperform

Northland Capital Markets downgraded Yelp (NYSE: YELP) from Market Perform to Underperform with a price target of $35.00 (from $49.00).

Analyst Darren Aftahi commented, "We are downgrading shares of YELP after its 1Q underperformance and weak 2Q guidance. FY’15 guidance maintained implying a now steeper 2H’15 ramp in performance. However, continued decelerating y/y growth in its overall user base continues to give us pause. Although mobile app users jumped this Q, overall mobile users continue to show deceleration. We believe downside risk remains meaningful for a stock that trades at ~37x EV/’15E EBITDA and ~110x ’16 P/E, with an ever increasing competitive landscape. On balance, we move from Market Perform rating to Underperform and have reduced our price target from $49 to $35 based on ~16x EV/’16E EBITDA."

The firm adjusted FY 2015 EPS from $0.15 to $0.16 and FY 2016 EPS form $0.50 to $0.46.

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

Shares of Yelp closed at $51.28 yesterday.

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