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 (NYS: YELP) has received the dreaded one-star ranking.
With that in mind, let's take a closer look at Yelp's business and see what CAPS investors are saying about the stock right now.
San Francisco (2004)
Internet software and services
Co-Founder/CEO Jeremy Stoppelman
Trailing-12-Month Operating Margin
$130.7 million / $0
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 91% of the 300 members who have rated Yelp believe the stock will underperform the S&P 500 going forward.
Like the rest of its social media brethren, Yelp appears to be valued more on eyeballs that profitability in a way that hearkens back to the height of the dot-com bubble. Online advice is a field with stiff competition (TripAdvisor and Google to name a few) and it will be difficult for Yelp to develop a competitive edge and profitability in a sustainable way. I look for the stock to underperform the S&P 500 as it gradually returns to Earth.
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The article 1-Star Stocks Poised to Plunge: Yelp? originally appeared on Fool.com.
Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool owns shares of Facebook, Google, and TripAdvisor. Motley Fool newsletter services have recommended buying shares of Google and TripAdvisor. 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 Fool's disclosure policy always gets a perfect score.
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