Why Yelp Shares Leaped


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of consumer-review website Yelp soared 24% today after the company's quarterly results and guidance topped Wall Street expectations.

So what: Yelp's first-quarter loss of $4.8 million was a bit wider than expected, but a beat on the top line -- revenue surged 68% to $46.1 million -- coupled with upbeat guidance for the rest of the year reinforces optimism about its growth prospects going forward. While the company remains in the red, analysts seem confident that Yelp's booming mobile business -- roughly 45% of Yelp searches now originate from the mobile app -- will drive big profits over time or simply be too juicy for a larger company not to gobble up.

Now what: Management now sees second-quarter revenue of $52.5 million-$53.5 million and a full-year top line of $216 million-$218 million, both nicely ahead of Wall Street, which landed at $50.4 million and $212 million. "Looking to the rest of the year, we will continue to focus our product innovation around the mobile experience and new features to better serve the consumer and local business owners, and we will continue integrating Qype into the Yelp platform," CEO Jeremy Stoppelman said. With the stock now up more than 100% from its June lows and trading at a price-to-sales of about 12, however, much of that bullishness might already be baked into the valuation.

Interested in more info Yelp? Add it to your watchlist.

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The article Why Yelp Shares Leaped originally appeared on Fool.com.

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