Yelp Inc. (YELP): A Bull Case Theory 

We came across a bullish thesis on Yelp Inc. on Valueinvestorsclub.com by surf1680. In this article, we will summarize the bulls’ thesis on YELP. Yelp Inc.’s share was trading at $28.62 as of December 1st. YELP’s trailing P/E was 12.91 according to Yahoo Finance.

Yelp, Inc. is currently trading at deeply discounted multiples, creating a compelling investment opportunity as near-term concerns appear fully priced in. The company’s 300 million+ human-written reviews of small businesses represent one of the most valuable data assets connected to the “main street” economy, particularly in the AI/LLM era, yet the stock trades at just 4x EBITDA, 13x trailing earnings, and 1.4x sales.

Yelp’s user base remains engaged, with younger demographics contributing meaningfully, and the platform maintains strong brand recognition and trust among both consumers and businesses. Its integration into Apple’s ecosystem underscores strategic optionality, including the potential for a premium acquisition by Apple, which could rapidly expand the platform’s reach.

Yelp’s financial profile is attractive, with rising EBITDA margins and declining EV/EBITDA ratios, highlighting undervaluation relative to peers. The company also benefits from recession-resistant components, as small businesses can dynamically allocate promotional spending on Yelp to sustain demand.

Share repurchases have aggressively reduced the outstanding share count, though this has yet to be fully reflected in stock performance, while employees continue to be compensated heavily with options. Additionally, Yelp ranks in the top decile of the Magic Formula, demonstrating strong ROIC and EV/EBITDA metrics relative to the broader market.

Fragmented ownership, underperformance, and a founder-led structure present a fertile environment for activist intervention or strategic transactions. A sale to Apple at a meaningful premium could unlock substantial value, delivering immediate returns for shareholders while positioning Yelp’s vast data set as a core asset for AI-driven monetization. Overall, Yelp represents a rare combination of undervalued tangible and intangible assets, resilient revenue streams, and strategic optionality, offering a highly asymmetric risk/reward profile for investors.

Previously we covered a bullish thesis on Angi Inc. (ANGI) by Michael in March 2025, which highlighted the company’s post-spin-off turnaround, strong insider alignment under Joey Levin, and path to profitability. The company’s stock price has appreciated approximately by 646.49% since our coverage. The thesis still stands as ANGI continues executing its growth strategy. surf1680 shares a similar perspective but emphasizes Yelp’s undervalued data assets, user engagement, and strategic optionality, highlighting a different path to asymmetric upside in tech-enabled services.

Yelp Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 25 hedge fund portfolios held YELP at the end of the second quarter which was 26 in the previous quarter. While we acknowledge the risk and potential of YELP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than YELP and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.