Yelp Inc.
Yelp Inc. Fundamental Analysis
Yelp Inc. (YELP) shows moderate financial fundamentals with a PE ratio of 8.91, profit margin of 9.94%, and ROE of 19.96%. The company generates $1.5B in annual revenue with moderate year-over-year growth of 5.61%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 70.4/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze YELP's fundamental strength across five key dimensions:
Efficiency Score
ExcellentYELP demonstrates superior asset utilization.
Valuation Score
ExcellentYELP trades at attractive valuation levels.
Growth Score
ExcellentYELP delivers strong and consistent growth momentum.
Financial Health Score
ExcellentYELP maintains a strong and stable balance sheet.
Profitability Score
ModerateYELP maintains healthy but balanced margins.
Key Financial Metrics
Is YELP Expensive or Cheap?
P/E Ratio
YELP trades at 8.91 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, YELP's PEG of -10.33 indicates potential undervaluation.
Price to Book
The market values Yelp Inc. at 1.82 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 6.07 times EBITDA. This is generally considered low.
How Well Does YELP Make Money?
Net Profit Margin
For every $100 in sales, Yelp Inc. keeps $9.94 as profit after all expenses.
Operating Margin
Core operations generate 12.60 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $19.96 in profit for every $100 of shareholder equity.
ROA
Yelp Inc. generates $15.19 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Yelp Inc. generates strong operating cash flow of $383.62M, reflecting robust business health.
Free Cash Flow
Yelp Inc. generates strong free cash flow of $333.67M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $5.29 in free cash annually.
FCF Yield
YELP converts 24.03% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
8.91
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-10.33
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.82
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.91
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.06
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.99
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.20
vs 25 benchmark
ROA
Return on assets percentage
0.15
vs 25 benchmark
ROCE
Return on capital employed
0.23
vs 25 benchmark
How YELP Stacks Against Its Sector Peers
| Metric | YELP Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 8.91 | 21.66 | Better (Cheaper) |
| ROE | 19.96% | 1190.00% | Weak |
| Net Margin | 9.94% | -55754.00% (disorted) | Weak |
| Debt/Equity | 0.06 | 1.32 | Strong (Low Leverage) |
| Current Ratio | 2.99 | 1.59 | Strong Liquidity |
| ROA | 15.19% | -202359.00% (disorted) | Strong |
YELP outperforms its industry in 4 out of 6 key metrics, particularly excelling in ROA, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Yelp Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
54.12%
Industry Style: Growth, Technology, Streaming
High GrowthEPS CAGR
259.73%
Industry Style: Growth, Technology, Streaming
High GrowthFCF CAGR
54.50%
Industry Style: Growth, Technology, Streaming
High Growth