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Take the Hint and Buy Yelp Inc Stock Already!

The online business review hub’s stock tumbled right after its Q3 earnings report, but the sellers changed their tune by the next morning

[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column width=”1/2″][vc_column_text css_animation=”fadeInLeft”]For a brief time after Wednesday’s post-close earnings report from Yelp Inc (NYSE:YELP), Yelp stock owners had good reason to be worried. The knee-jerk reaction to the news was a 9% plunge.

It was a short-lived setback though, mostly driven by a disappointing fourth-quarter outlook … Yelp dialed back its top-line estimate for Q4 by about 8% less than analysts were expecting.

It wasn’t a selling effort that took hold though. By the time Thursday’s opening bell rang, the loss was pared back to less than 1%, as investors realized the company’s likely fourth quarter top line would still be roughly 9% better than sales from Q4 of 2016.

Better yet, Yelp posted its second huge profit surprise for the year last quarter.

Yelp Earnings Recap

For its third quarter ending in September, online business-review repository Yelp turned $222.4 million worth of sales into earnings of nine cents per share, or non-GAAP income 29 cents per share of Yelp.

Analysts were collectively expecting the company to report a loss of two cents per share on revenue of $220.8 million. Yelp Inc. posted a profit of two cents per share of YELP stock in the comparable quarter of 2016, when it generated $186.2 million in sales.[/vc_column_text][/vc_column][vc_column width=”1/2″][vc_raw_html]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[/vc_raw_html][vc_raw_html]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[/vc_raw_html][/vc_column][/vc_row][vc_row][vc_column][vc_column_text css_animation=”fadeIn”]CEO Jeremy Stoppelman commented “We executed well in the third quarter, growing revenue by 19% and generating positive net income. Traffic growth continues to be healthy, with app unique devices growing 21% year-over-year, and our retention efforts have contributed to strong double-digit advertiser account growth.”

In Flux

Yelp has been a difficult name to handicap largely because it’s been reconfiguring lately. Case in point: It recently got out of the food-ordering business, selling its Eat24 platform to rival GrubHub Inc(NYSE:GRUB) … a wise decision in light of the fact that Amazon.com, Inc. (NASDAQ:AMZN) is at the precipice of tiptoeing into that turf.

Yelp is still partnering with GrubHub in terms of online food-ordering, though.

At the same time, Yelp is wading deeper into an effort to better monetize its localization features. That is to say, the natural, geographic stratifications that inevitably pop up when given enough time have become a full-blown product in and of themselves.

More and more businesses are signing up for paid exposure at the Yelp site, to better manage the message that was being conveyed by reviewers anyway. All told, the number of paying advertising accounts reached 155,000, up 18% year-over-year.

Yelp has also turned up the heat on its Request-a-Quote service that connects consumers with service providers — a revenue bearing platform that capitalizes on knowing where consumers are located, and knowing which businesses are nearby.

Goldman Sachs believes the Request-a-Quote service could facilitate 14 million business price quotes this year, and eventually mean $350 million in annual revenue. This so-called transactional revenue rolled in at $18.5 million for the quarter, 16% better than the third quarter of 2016.

Advertising revenue totaled $199.6 million, up 18% year-over-year.

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