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Yelp Q2 Preview: Loss Seen Widening, Revenue Rising

Reviews website Yelp (YELP) is expected to post a wider per-share loss for Q2 despite another 60%-plus jump in revenue, when it reports Q2 results after the market close Wednesday.

Wall Street forecasts a 4-cent loss vs. a 3-cent loss in the year-earlier period, according to analysts polled by Thomson Reuters.

Sales are seen rising 63% to $53.3 million. Year-over-year sales have risen 63% to 68% in each of the previous six quarters.

Bloomberg

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“Yelp has been executing well, and continues to grow top-line at a very high rate,” wrote RBC Capital Markets analyst Mark Mahaney in a research note. “However, given the current high valuation, we think that this potential is priced in.”

Yelp’s monthly unique visitors hit 102 million in Q1, up from 71.4 million a year earlier. At the end of Q1, the company said about 45,000 businesses had “claimed” their pages on the site. Many businesses that claim, or take control of, their site pay to advertise on Yelp, though not all do so. Analyst Mahaney is looking for the company to hit 52,000 “claimed” pages in Q2.

Yelp’s stock jumped 27% the day after it reported better-than-expected Q1 results in early May, and the stock is up 66% since the day before that jump, though shares were down a fraction in early afternoon trading in the stock market today.

The bulk of Yelp’s revenue comes through advertising, and the company is “one of the best positioned” for local ads online, wrote Jefferies analyst Brian Pitz in a research note. He rates the stock a buy.

“We continue to like the story into 2Q and think the company has potential to surprise to the upside in the local advertising segment,” Pitz wrote in mid-July.

About 36% of Yelp’s local ads were viewed on a mobile device in Q1, up from 25% in Q4. Wall Street is going to be looking closely at that figure with the Q2 results.

RELATED: Yelp Purchase Of Reservation Site Gets Nice Reception.

Yelp Hits New High As Review Site Tests Deliveries.

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Mystic Maggie

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