YELP - Yelp Should Outperform Despite Lowered Expectations

2024-04-09 00:17:00 ET

Summary

• Yelp's stock has dipped over 10% this year despite the broader market rally, driven by setting its 2024 outlook below consensus marks.
• The company has a history of starting off the year with low guidance and then beating expectations, making the recent dip a buying opportunity.
• Yelp's valuation is low at ~7x adjusted EBITDA even against its conservative outlook. Growth drivers, including and especially in Services, are already bearing fruit in recent results.
• The company also plans to keep headcount flat in 2024, helping to support its margin profile.

The stock market remains frothy this year, and one of my top strategies to combat against potential broad-based downside is to shift the majority of my tech portfolio into value-oriented names. In particular, I'm keen on stocks that have taken recent unwarranted dips that have an opportunity to rebound throughout the remainder of the year....

For further details see: