Does Yelp Need Help?

Yelp Inc YELP reported Q1 results Wednesday and disappointed investors with weak sales.

The stock plummeted following the news and recently traded at $39.45, down 23 percent.

Analysts gave their take on the results and many remained bullish on the stock. Below are highlights along with current ratings and price targets.

Morgan Stanley - Overweight, $62 price target

“A misstep in realigning the sales force impacted 1Q, but it doesn’t change our core thesis that local ad growth is driven by sales headcount and improving sales force productivity. 1Q is past and YELP now needs to start hiring and dialing for ad dollars.”

Credit Suisse - Outperform, $70 price target

“Yelp missed 1Q15 to due self-inflicted headwinds from a sales force reorganization which was reversed intra-quarter. And as it has already seen a return to normality in sales force productivity in 2Q15, we look through the 1Q15 miscue and focus on KPIs which assuage concerns around traffic and advertiser growth. In particular we are encouraged by the subscriber adoption of CPC-based advertising, which stands at 40% of total – this may weigh on ARPU growth NT, but we believe this has LT potential to drive spending much higher.”

Barclays - Overweight, $50 price target

“Local advertising revenue of $98.6M was about in line with our estimate but below the Street, which may suggest ongoing softness in local advertising account growth. As mentioned, we think it will take time for the Yelp platform to drive a meaningful uptick in local advertiser growth.”

RBC Capital Markets - Sector Perform, $50 price target

“We still view YELP as a top-of-funnel, strong-brand unique asset with downstream transaction capability. But that transaction capability could take a long time to play out. Further, the two growth gap-up scenarios we have been counting on have yet to play out: 1) Yelp’s younger cohort markets are generating revenue dramatically below the level of Yelp’s older markets, but we’re now seeing substantial decel in all cohorts’ revenue growth – the CPC ad model transition isn’t having a positive impact; & 2) Yelp’s Int’l markets have yet to break out of the 3% contribution range, and now Int’l Unique Visitor numbers have flat-lined.”

Brean Capital - Buy, $58 price target

“Exiting the quarter, while disappointed that 1Q15 operating results did not meet our expectations, we were encouraged by the fact that management retained its full-year sales and adjusted EBITDA outlook and that multiple levers remained for full-year upside. We believe the 15.2% after-market decline is not reflective of the current state of the business. We would take advantage of the pullback to pick up shares.”

Wunderlich - Buy, $75 price target

“Demand for its CPC (cost per click) ad products are increasing, which were 40% of local ad revenues in Q1, up from 32% in Q414. Yelp's Brand advertising dropped 23% q/q due to an industry shift to more programmatic ad buying, which carries lower CPMs than Yelp's direct sold deals. Brand advertisers are favoring more interstitial and/or video ads, which Yelp doesn't want degrading its user experience, although the brand revenues should grow sequentially in Q2.”

Image credit: Nan Palmero, Flickr