Why Yelp Is Poised to Underperform (YELP)

Why Yelp Is Poised to Underperform

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	$1.3 billion
Industry	Internet software and services
Trailing-12-Month Revenue	$121.3 million
Management	Co-Founder/CEO Jeremy Stoppelman CFO Robert Krolik
Trailing-12-Month Return on Equity	(26.2%)
Cash/Debt	$123.1 million / $0
Competitors	Facebook Google Yahoo!

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

On CAPS, 84% of the 318 members who have rated Yelp believe the stock will underperform the S&P 500 going forward.

Earlier this week, one of those Fools, Clint35, expressed a great deal of skepticism over Yelp's business model:

Maybe I'm old-fashioned but I don't get why anybody needs Yelp. As a consumer I wouldn't depend on a bunch of strangers' opinions to decide where to eat or where to go to have fun. As a business owner I wouldn't pay money to have a company show reviews of a bunch of strangers. How does anybody know if the reviews are reliable or not? What's wrong with traditional advertising? Or having a small website? Or Heaven forbid, word of mouth? In today's modern age people still talk to each other. They also have competition from Google and a few others.

If you want market-thumping returns, you need to protect your portfolio from any undue risk. Luckily, we've found another stock we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2013." 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.

Jeff Fischer and team have demystified options. And they can rack up income like $1,030... $2,626... and $3,228 on a schedule you can set your watch by!
That's why we're glad to announce every single one of their closely guarded strategies is available to YOU during May and June – 100% FREE, no strings attached! Just enter your email address in the box below...

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 icon found on every comment.

Report this Comment On January 18, 2013, at 11:18 AM, oSpydero wrote:

"Maybe I'm old-fashioned but I don't get why anybody needs The Motely Fool. As a stock trader, I wouldn't depend on a bunch of strangers' opinions to decide what equity to buy..."

updated Moments ago Sponsored by:
	DOW	15,307.17	-80.41	-0.52%
	S&P 500	1,655.35	-13.81	-0.83%
	NASD	3,463.30	-38.82	-1.11%

YELP	$29.40		-2.18	-6.90%
Yelp		CAPS Rating:

YHOO	$26.54		-0.46	-1.70%
Yahoo!		CAPS Rating:

GOOG	$889.42		-17.55	-1.94%
Google		CAPS Rating:

FB	$25.16		-0.50	-1.95%
Facebook		CAPS Rating:

My Watchlist

0

Why Yelp Is Poised to Underperform

Comments from our Foolish Readers

Report this Comment On January 18, 2013, at 11:18 AM, oSpydero wrote:

Add your comment.

Compare Brokers

Report This Comment

Sending report...

Today's Market

Create My Watchlist

You don't seem to be following any stocks yet!

Related Tickers