Yelp Inc (YELP) Shares Fall on News of a Facebook (FB) Competitor Site/App

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Yelp Inc (NYSE:YELP) was founded in 2004, and since then they have held their own when it comes to crowd-sourced reviews for local businesses. When looking for a restaurant to eat at, many customers rely heavily on Yelp’s website. However, things may be getting a bit more complicated than the easy breezy ride that the company and their shareholders have had over the past 11 years. That’s because today, Facebook (NASDAQ:FB) has been found to be quietly testing a Yelp-like feature called “Facebook Professional Services”, which allows users to search via location through 85 different business types, and then leave detailed reviews to the desired business.

Yelp Inc (NYSE:YELP) gets a significant amount of their traffic via their mobile app, and while Facebook (NASDAQ:FB) currently is only testing a desktop version, without a doubt the company certainly has plans to expand to Android and iOS if successful.

The stock is down 8.49% or $2.51 following the news, hitting $27.07 per share. About 3.31M shares traded hands or 25.38% up from the average. YELP has declined 39.42% since May 12, 2015 and is downtrending. It has underperformed the S&P500 by 35.75%.

From a total of 25 analysts covering Yelp (NYSE:YELP) stock, 8 rate it a “Buy”, 3 a “Sell”, and 14 a “Hold”. This means that 32% of the ratings are positive. The highest target price is $50 while the lowest target price is $17.50. The mean of all analyst targets is $30.82 which is 13.85% above today’s ($27.07) stock price. Yelp was the topic of 36 analyst reports since July 28, 2015 according to the firm StockzIntelligence Inc. RBC Capital Markets upgraded shares on November 13 to a “Outperform” rating. Cowen & Co downgraded shares to a”Market Perform” rating and a $25 target share price in their report from a July 29. Barclays Capital maintained YELP stock in a recent report from October 29 with a “Equal-Weight” rating. Morgan Stanley downgraded the rating on July 29. Morgan Stanley has a “Equal Weight” rating and a $25 price target on shares. Finally, Roth Capital initiated the stock with a “Sell” rating in a report they issued on an October 28.

The institutional sentiment decreased to 0.63 in Q2 2015. It’s down 0.87, from 1.5 in 2015Q2. The ratio dived, as 90 funds sold all their Yelp Inc shares they owned while 60 reduced their positions. 29 funds bought stakes while 65 increased their total positions. Institutions now own 49.74 million shares which is 17.75% less than the previous share count of 60.47 million in 2015Q2.

Tybourne Capital Management Hk Ltd holds 9.38% of its total portfolio in Yelp Inc, equating to 6.15 million shares. Stonerise Capital Management Llc owns 891,800 shares representing 8.54% of their total US portfolio. Moreover, Dragoneer Investment Group Llc has 6.54% of their total portfolio invested in the company, equating to 767,636 shares. The New York-based Brightfield Capital Management Llc has a total of 5.56% of their portfolio invested in the stock. Kerrisdale Advisers Llc, a New York-based fund reported 739,664 shares owned.

Since March 5, 2015, the stock had 0 insider purchases, and 14 selling transactions for a total of $2.41 million in net activity. Donaker Geoffrey L sold 6,000 shares worth $134,297. Nachman Joseph R sold 385 shares worth $9,123. Wilson Laurence sold 385 shares worth $9,123. Stoppelman Jeremy sold 8,000 shares worth $284,878. The insider Krolik Robert J sold 15,000 shares worth $729,797.

Yelp Inc. connects people with local businesses by bringing ‘word of mouth’ online and providing a platform for businesses and clients to engage and transact. The company has a market cap of $2.12 billion. The Firm provides local business review sites. It has 243.17 P/E ratio. Yelp provides a platform for clients to share their everyday local business experiences, through reviews, tips, photos and videos, and engage directly with businesses, through reviews and its Message the Business feature.

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