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what it is
Yelp helps people find local businesses, then charges those businesses for advertising in front of that traffic.
how it gets paid
Last year Yelp made $1.5B in revenue. Services advertising was the main engine at $0.84B, or 56% of sales.
why it's growing
Revenue grew 3.7% last year. The 10.91% EPS beat matters most because it shows Yelp is managing costs better than expected in a 3.7% revenue growth business.
what just happened
Yelp reported $0.61 in EPS, beating the $0.55 estimate by 10.91%.
At a glance
B+ balance sheet — decent shape, but not bulletproof
25/100 earnings predictability — expect surprises
12.8x trailing p/e — the market's not buying it — or you found a deal
14.5% return on capital — nothing to write home about
xvary composite: 62/100 — average
What they do
Yelp helps people find local businesses, then charges those businesses for advertising in front of that traffic.
Yelp wins because local intent is hard to fake. When you need a plumber tonight, you care less about brand and more about reviews, photos, and who picks up the phone. That habit supports a $1.5 billion revenue base, and a 13.0% operating margin (operating margin → profit after running the business → Yelp still turns traffic into real earnings).
How they make money
$1.5B
annual revenue · their business grew +3.7% last year
Services advertising
$0.84B
+11.5%
Restaurants, retail and other advertising
$0.54B
+4.0%
Performance and transaction products
$0.08B
+3.7%
Other revenue
$0.04B
+3.7%
The products that matter
selling ads to local businesses
Advertising
$1.3B · 85% of sales
it's the core business. $1.3B of revenue means this segment still decides whether yelp grows, stalls, or shrinks.
core engine
reservations and food delivery
Services
$150M · 10% of sales
this $150M segment is the second act investors want, but at just 10% of revenue it is still too small to carry the company on its own.
small but important
Key numbers
12.8x
trailing p/e
P/E → price-to-earnings ratio → what you pay for each dollar of profit. You are paying 12.8 times trailing earnings for a business with projected 15.0% earnings growth.
$41
18-month target
One published 18-month target is $41 against a $28.13 stock price. That 46% gap is the whole argument.
13.0%
operating margin
Operating margin → profit after paying to run the business → so what: Yelp is still a real business, not just a website with traffic.
14.5%
return on capital
Return on capital → profit earned on the money put into the business → so what: Yelp is not lighting shareholder cash on fire.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 50 / 100
- net profit margin 10.7% — keeps 11 cents of every dollar in revenue
- return on equity 14% — $0.14 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in YELP 3 years ago → it's now worth $9,680.
The index would have given you $14,770.
source: institutional data · total return
What just happened
beat estimates
Yelp reported $0.61 in EPS, beating the $0.55 estimate by 10.91%.
The quarter beat on profit even while revenue growth stayed modest. That fits the current Yelp story: slow top-line growth, better cost control, and a business that still converts traffic into earnings.
$1.5B
annual revenue
$0.61
quarterly eps
10.91%
eps surprise
the number that mattered
The 10.91% EPS beat matters most because it shows Yelp is managing costs better than expected in a 3.7% revenue growth business.
-
yelp turned in a solid performance for the third quarter of 2025.
-
both the top and bottom lines came in ahead of our expectations, with the former up by 4% vs. prior year, while the latter rose by roughly 11%.this performance is especially impressive as the company is facing a challenging macroeconomic environment and bears out the wisdom of its strategic focus on services over the last several years.
-
looking ahead, we are holding steady with our estimates for now.
-
continuing the recent pattern, revenue in the company’s services segment grew during the september period, while restaurants, retail, and other (rr&o) revenue declined.although the rr&o segment was yelp’s core business for many years, more recently services has overtaken it due to consistently strong growth, while lingering macroeconomic difficulties have caused rr&o to founder.
-
in the most recent quarter, advertising revenue for services increased 7% vs. prior year, partially offset by a 2% decline in rr&o revenue.
source: company earnings report, 2026
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What could go wrong
the #1 risk is local business ad budgets weakening while advertising still drives 85% of revenue.
med
advertising concentration
advertising contributes $1.3B of yelp's $1.5B revenue. when one segment carries 85% of the business, a slowdown there is not a side issue. it is the issue.
if local merchants cut spend, most of the income statement feels it immediately.
med
traffic dependence and platform competition
250 million monthly active users and 45 million listings are meaningful scale. they do not make yelp immune to google, maps, or social discovery stealing the search moment.
if consumer discovery shifts away from yelp, ad inventory gets less valuable before the company has time to replace it.
med
services is still too small
services produced $150M, or 10% of revenue. investors want it to be the growth offset. right now, it is still a supporting actor.
if that business stops gaining relevance, the rerating case weakens and the stock stays tied to slow ad growth.
med
review and advertising practice scrutiny
yelp has long operated in a category that invites complaints about ranking, visibility, and paid placement. even without a headline fine in this dataset, the risk is part of the business model.
legal or regulatory pressure would hit reputation first and monetization second.
a slowdown in local ad demand hits the part of yelp that produces roughly $1.3B of revenue — about 85% of the whole company.
source: institutional data · regulatory filings · risk analysis
Pay attention to
trend
services staying too small
services is only $150M and 10% of revenue. if that mix barely moves, the second-engine thesis stays theoretical.
metric
advertising growth versus 3.7%
the core ad business is still 85% of revenue. watch whether growth meaningfully improves from last year's 3.7% pace.
calendar
next earnings for proof of reacceleration
one clean beat is nice. you want to see whether quarterly revenue can move above the recent $376M run rate with better mix.
risk
merchant budget pressure
small local businesses are the customer base. if ad budgets tighten, yelp feels it where it makes most of its money.
Analyst rankings
short-term outlook
top 20%
momentum score 2 — analysts expect above-average price performance in the year ahead. in human-speak: they like the setup more than the growth profile suggests.
risk profile
average
stability score 3 — middle-of-the-road risk. not a bunker stock, not a rollercoaster.
chart momentum
average
technical score 3 — the chart is not screaming anything unusual right now.
earnings predictability
25 / 100
earnings predictability is low. translated: expect cleaner surprises here than you get with steadier compounders.
source: institutional data
Institutional activity
145 buyers vs. 190 sellers in 3q2025. total institutional holdings: 62.7M shares.
source: institutional data
Price targets
3-5 year target range
$24
$58
$28
current price
$41
target midpoint · +46% from current · 3-5yr high: $85 (+200% · 26% ann'l return)
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