YELP Q3 Earnings Beat: Will Weak Guidance Drag the Stock Down?

Yelp Inc. YELP reported third-quarter 2024 earnings of 56 cents per share, beating the Zacks Consensus Estimate by 40%. The figure declined 29.1% year over year.YELP’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 165.12%.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.YELP’s revenues increased 4.4% year over year to $360.3 million but marginally missed the Zacks Consensus Estimate by 0.11%.Following its lower-than-expected third-quarter revenue estimates, YELP lowered guidance for 2024. This raises concerns about the company’s near-term prospects, which might weigh on its share price performance. YELP shares lost nearly 3% in the pre-market trading. Shares of YELP have plunged 19.7% year to date, underperforming the Zacks Computer & Technology sector’s return of 28.5%.Yelp Inc. Price, Consensus and EPS Surprise Yelp Inc. price-consensus-eps-surprise-chart | Yelp Inc. Quote Quarter in DetailYelp’s advertising revenues (95.6% of total revenues) increased 4% year over year to $344 million, mainly driven by a rise in ad clicks and increasing cost per click. Our model estimate for Advertising revenues was pegged at $346.5 million.Advertising revenues for the Services business grew 11% year over year to $228 million, driven mainly by strong demand from advertisers and a rise in paying advertising locations. The RR&O division decreased 6% year over year to $116.4 million. This decline in the segment was due to persistent macroeconomic headwinds that have further challenged restaurant and retail businesses, reducing demand for Yelp’s services in the RR&O category. Other revenues increased 5.6% to $16 million. Our model estimates for Services, RR&O and Other revenues were pegged at $232.2 million, $114.3 million and $15 million, respectively.Paying Advertising Locations decreased 7% year over year to 524,000. Per our model, Paying Advertising Locations were pegged at 534,000.Total costs and expenses increased 3.4% year over year to $313.7 million.Yelp’s third-quarter adjusted EBITDA climbed 5% year over year to $101 million. The adjusted EBITDA margin remained flat year over year at 28%.Balance Sheet & Cash FlowAs of Sept. 30, 2024, Yelp’s cash, cash equivalents and short-term marketable securities were $397 million without any debt.The company generated an operating cash flow of $102.3 million and a free cash flow of $92.5 million in the third quarter.Q4 and FY24 GuidanceFor fourth-quarter 2024, Yelp anticipates revenues between $347 million and $352 million. Adjusted EBITDA is projected in the band of $84-$89 million.For 2024, the company now anticipates revenues between $1.397 billion and $1.402 billion, down from the previous guidance of $1.410-$1.425 billion. The adjusted EBITDA is now expected in the range of $341-$346 million compared with the previous guidance of $325-$335 million.Yelp’s Zacks Rank & Other Stocks to ConsiderYelp currently sports a Zacks Rank #1 (Strong Buy).Some other top-ranked stocks in the broader technology sector are Shopify SHOP, Arista Network ANET and CyberArk CYBR, each sporting a Zacks Rank #1 at present. You can see the complete list of today's Zacks #1 Rank stocks here.The consensus mark for Shopify’s 2024 earnings has been revised upward by 13 cents to $1.12 per share over the past 90 days, indicating a 51.31% year-over-year increase. The long-term expected earnings growth rate for the stock stands at 39.2%. Shares of SHOP have gained 2.7% in the year-to-date period.The Zacks Consensus Estimate for ANET’s 2024 earnings has been revised upward by 4 cents to $8.28 per share in the past 30 days, indicating an increase of 16.28% on a year-over-year basis. It has a long-term earnings growth expectation of 15.3%. Shares of FTNT have jumped 40.8% in the year-to-date period.The Zacks Consensus Estimate for CyberArk’s fiscal 2024 earnings has been revised upward by a penny to $2.30 per share in the past seven days, suggesting a year-over-year increase of 105.4%. It has a long-term earnings growth expectation of 33.4%. Shares of CYBR have plunged 21.3% in the year-to-date period.Free: 5 Stocks to Buy As Infrastructure Spending SoarsTrillions of dollars in Federal funds have been earmarked to repair and upgrade America’s infrastructure. In addition to roads and bridges, this flood of cash will pour into AI data centers, renewable energy sources and more.In, you’ll discover 5 surprising stocks positioned to profit the most from the spending spree that’s just getting started in this space.Download How to Profit from the Trillion-Dollar Infrastructure Boom absolutely free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Yelp Inc. (YELP): Free Stock Analysis Report Arista Networks, Inc. (ANET): Free Stock Analysis Report CyberArk Software Ltd. (CYBR): Free Stock Analysis Report Shopify Inc. (SHOP): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks