The 10-second takeaway
For the quarter ended March 31 (Q1), Yelp beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly. Non-GAAP earnings per share grew. GAAP loss per share dropped.
Margins increased across the board.
Yelp booked revenue of $46.1 million. The 17 analysts polled by S&P Capital IQ hoped for revenue of $44.5 million on the same basis. GAAP reported sales were 68% higher than the prior-year quarter's $27.4 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.01. The 11 earnings estimates compiled by S&P Capital IQ anticipated -$0.01 per share. Non-GAAP EPS were $0.01 for Q1 versus -$0.31 per share for the prior-year quarter. GAAP EPS were -$0.08 for Q1 compared to -$0.31 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 92.8%, 60 basis points better than the prior-year quarter. Operating margin was -8.4%, much better than the prior-year quarter. Net margin was -10.4%, much better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $53.2 million. On the bottom line, the average EPS estimate is $0.03.
Next year's average estimate for revenue is $218.8 million. The average EPS estimate is $0.14.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 56 members out of 338 rating the stock outperform, and 282 members rating it underperform. Among 119 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), eight give Yelp a green thumbs-up, and 111 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Yelp is hold, with an average price target of $24.57.
Internet software and services are being consumed in radically different ways, on new and increasingly mobile devices. Is Yelp on the right side of the revolution? Check out the changing landscape and meet the company that Motley Fool analysts expect to lead "The Next Trillion-dollar Revolution." Click here for instant access to this free report.
- Add Yelp to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. 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.