Yelp Hits Record on Local Ad Success
The local business review site Yelp (NYSE:YELP) reached a record high during trading on Wednesday after a research note from JPMorgan (NYSE:JPM) seen by Bloomberg said the firm had increased its estimated 12-month share price for the website from $75 to $89. Yelp shares closed at $78.42 on Wednesday afternoon after reaching a high of $79.89 during the day’s trading session.
JPMorgan analyst Kaizad Gotla cited Yelp’s success at getting advertisers across a variety of industries to buy Yelp promotions as the reason for the revised estimate. This comes just after Telsey Advisory Group raised its price target on the stock from $62 to $95 on the strength of Yelp’s advertising as well, Bloomberg said. “There’s significant room for strong revenue growth and margin expansion for Yelp as it remains relatively underpenetrated in local advertising,” Gotla wrote. “The pace of innovation in new advertising products is accelerating and the company is making good progress towards closing the loop for advertisers.”
This comes after the company posted some lackluster third-quarter results back in October. Reviews and unique monthly visitors increased and revenue beat forecasts during the third-quarter of 2013, but the company posted a wider-than-expected loss of 4 cents a share.