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What Does Yelp Inc’s (NYSE:YELP) Share Price Indicate?

Yelp Inc (NYSE:YELP), a internet company based in United States, received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to $47.92 at one point, and dropping to the lows of $40.71. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Yelp’s current trading price of $41.98 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Yelp’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View out our latest analysis for Yelp

Is Yelp still cheap?

The stock is currently trading at US$41.98 on the share market, which means it is overvalued by 20.42% compared to my intrinsic value of $34.86. Not the best news for investors looking to buy! But, is there another opportunity to buy low in the future? Since Yelp’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will Yelp generate?

NYSE:YELP Future Profit June 22nd 18
NYSE:YELP Future Profit June 22nd 18

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Yelp, at least in the near future.

What this means for you:

Are you a shareholder? If you believe YELP is currently trading above its value, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the uncertainty from negative growth in the future, this could be the right time to reduce your total portfolio risk. But before you make this decision, take a look at whether its fundamentals have changed.

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Are you a potential investor? If you’ve been keeping tabs on YELP for some time, now may not be the best time to enter into the stock. Its price has risen beyond its true value, on top of a negative future outlook. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Should the price fall in the future, will you be well-informed enough to buy?

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Yelp. You can find everything you need to know about Yelp in the latest infographic research report. If you are no longer interested in Yelp, you can use our free platform to see my list of over 50 other stocks with a high growth potential.


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.