Yelp generated most of its revenue, $109.16 million, or 79% of the total revenue, from local advertising. Brand advertising ranked second with nearly $20.6 million in revenue, accounting for 15% of the total 2012 revenue.
Facebook is trading at around $27.40 per share, with a total market cap of more than $65 billion. In terms of earnings valuation, Facebook seems to be quite expensive at nearly 35.2 times its forward earnings. The EV/EBITDA is as high as 47.76. However, with its fast growth, Facebook’s PEG is quite reasonable at 1.57. LinkedIn has the highest earnings multiple among the three. It is trading at nearly $195 per share, with a forward P/E of as high as 94.1. Its EV/EBITDA is nearly 161. The market values LinkedIn at 2.26 PEG, which already accounts for its potential growth. Yelp is generating losses, with the negative EBITDA. Thus, its EV/EBITDA is not valid. At $25.30 per share, Yelp is valued at more than 100 times its forward earnings.
My Foolish take
Yelp seems to have the lowest market valuation per user. However, its revenue source is much narrower than both LinkedIn and Facebook. Just think about this. Most of people will have Facebook account, then LinkedIn account, then Yelp. Among the three, Facebook Inc (NASDAQ:FB) seems to be the most decent pick due to its highest number of active users, its reasonable PEG ratio and the reasonable value per user. Moreover, Facebook is on the way to monetize the potential value of its huge valuable data.
The article Is Facebook a Buy Now? originally appeared on Fool.com and is written by Anh Hoang.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.