Yelp Shares Fly Higher As Goldman Sachs Upgrades Stock To 'Buy,' Foresees Single-Digit Revenue Growth From 2024-2027

Shares of Yelp Inc YELP were flying higher in early trading on Monday, raising the stock's gains to over 50% year to date.

A proprietary study of the advertising industry suggests that the company could generate mid to high single-digit revenue growth from 2024 to 2027, according to Goldman Sachs.

The Yelp Analyst: Eric Sheridan upgraded the rating for Yelp from Neutral to Buy, while raising the price target from $38 to $47.

The Yelp Thesis: A “broadly stable-to-improving local advertising environment” could propel the company’s revenues ahead, Sheridan said in the upgrade note.

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Yelp’s revenues could also be fueled by “recent investments in its ad tech stack (better measurement/attribution, improved matching algorithm and budget optimization, etc.) driving sustained ad price inflation” as well as “the continued scaling of newer initiatives (e.g. YELP Audiences) driving both better auction density and a more diversified revenue base over time,” the analyst wrote.

“In addition, we see the potential for steady margin expansion over the next 5 years as revenue growth is generated at high incremental margins through a combination of high-margin CPM/CPC inflation and limited opex growth driving operating leverage,” he further stated.

YELP Price Action: Shares of Yelp were spiking 10.54% to $42.15 at the time of publishing Monday.

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