YELP Technical Analysis

Accuracy score :
97%

Yelp Inc operates in the online content market based primarily in the United States. It provides a web-based platform and mobile application to bridge the gap between businesses and consumers. Its platform covers various local business categories, including restaurants, shopping, beauty and fitness, arts, entertainment and events, home and local services, health, nightlife, travel and hotel, auto, and others categories. The platform assists consumers through product reviews, tips, photos and videos thereby enabling them in making better buying decisions and posting their feedbacks. It also caters to businesses in reaching out to potential customers by providing advertising space. In addition, it also lets the buyers directly transact with businesses directly through its platform. Yelp generates revenue primarily from the sale of advertising on its website and mobile app to businesses and, to a lesser extent, from fees on transactions completed on its platform and subscription fees for its non-advertising products. As in past years, advertising accounted for the vast majority of its revenue during the year ended December 31, 2018 , accounting for 97% of its revenue, as compared to approximately 91% for the year ended December 31, 2017 and approximately 90% for the year ended December 31, 2016.

Summary (from the latest 2018 annual and quarterly report)

  • Total equity: 1.07 billion USD
  • Market Cap is 2.84 billion  USD ( the last price of the stock is 34.71 USD)
  • Yelp Inc operates in the online content market based primarily in the United States. It provides a web-based platform and mobile application to bridge the gap between businesses and consumers
  • The company has 333 million USD in cash on the account (from the latest quarterly report)
  •  In 2018 long-term debt was zero, short – term debt was also zero (In 2017 total debt was zero)
  • Company's revenue increased in 2018 to 943 million USD from 847 million in 2017
  • Net income in 2018 was 55 million USD, Net income in 2017 was 153 million USD

 

Technical analysis

This stock has weakened more than 30% since September 2018 and according to the rules of technical analysis, the "bearish" trend of this stock is still very strong. During the year ended December 31, 2018, Yelp generated net revenue of $942.8 million, representing 11% growth over 2017, net income of $55.4 million and adjusted EBITDA of $183.1 million. In 2019, YELP plans to continue its efforts to build a more diversified, modern and efficient go-to-market strategy by shifting its emphasis to the most efficient and high-margin sales channels, including sales partnerships and its self-serve channel. On this chart (the period from August 2018), I marked resistance and support levels. Support levels are 34 and 30 USD, 40 and 50 USD represent the current resistance levels. If the price jumps above 40 USD it would be a "BUY" signal and we have the open way to 45 USD. Rising above 50 USD supports the continuation of the bullish trend overview efficiently for the upcoming period. On the other side, if the price breaks 30 USD once again it would be a "SELL" signal and we have the open way to 28 and 25 USD.

 

The management of the company expects that 2019 will be another transition year for Yelp as the company continues the repositioning of it's business and strategy. The management believes that Yelp will drive long-term revenue growth and improved profitability in the 2019 year.

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