1-Star Social-Media Stocks Set to Slump: Yelp?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, local-business review site Yelp (NYSE: YELP  ) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Yelp and see what CAPS investors are saying about the stock right now.

Yelp facts

Headquarters (founded)

 San Francisco (2004)

Market Cap

$1.6 billion

Industry

Internet software and services

Trailing-12-Month Revenue

$107.3 million

Management

Co-Founder/CEO Jeremy Stoppelman
CFO Robert Krolik

Trailing-12-Month Operating Margin

(16.7%)

Cash/Debt

$122.6 million/$0

Competitors

Facebook (Nasdaq: FB  )
Google
(Nasdaq: GOOG  )
Yahoo!
(Nasdaq: YHOO  )

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 90% of the 367 members who have rated Yelp believe the stock will underperform the S&P 500 going forward.

This past summer, one of those Fools, JaiYen, offered some unique insight into the Yelp bear case:

I am a small business owner and would be quickly bankrupt were I so silly with my ad dollars as to buy into such a flawed model. If I have good reviews, why buy the cow when the milk is free? If I have bad reviews, why highlight my presence on Yelp? It's expensive and a lose, lose proposition for their core small business market. I can personally attest that their strong armed sales tactics and outrageous pricing have been the subject of much ridicule at our local Chamber of Commerce. This is the view from the ground. Anyone buying this stock has their head in the clouds.

If you want market-thumping returns, you need to protect your portfolio from any undue risk. Luckily, we've found another growth play we are incredibly excited about -- excited enough to dub it "The Only Stock You Need to Profit from the NEW Technology Revolution." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

Fool contributor Brian Pacampara has no positions in the stocks mentioned above. The Motley Fool owns shares of Facebook and Google and has the following options: long JAN 2014 $20.00 calls on Facebook. Motley Fool newsletter services recommend Facebook and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2059192, ~/Articles/ArticleHandler.aspx, 8/20/2014 4:59:11 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement