Yelp stock gains after Evercore upgrade

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Shares of Yelp Inc. are up more than 2% in premarket trading Wednesday after Evercore ISI analyst Benjamin Black upgraded he stock to outperform from in line, with a $37 price target. Yelp’s stock is still off 30% from pre-pandemic levels, Black wrote, and the company’s revenue rebound is likely to follow the “proliferation of vaccines.” Still, he notes that Yelp’s revenue was down only about 15% coming out of the third quarter, which in his view suggests “there is good reason to believe that it can recover faster than the broader travel industry.” Investors are also underappreciating Yelp’s improving cost structure, he added. “While Yelp’s cost improvements are more about a structural shift away from sales-force led local sales and thus likely carry more risk than fixed reductions at Expedia , the company has been proving out the power of this [shift] during COVID,” Black wrote. Yelp shares have declined 18% so far this year as the S&P 500 has added about 10%.
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