Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Yelp Inc (YELP) Earnings: An Early Look

Earnings season is in full swing, with many companies having already given their latest numbers to investors. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed knee-jerk reaction to news.

Yelp Inc (NYSE:YELP)

Let’s turn to Yelp Inc (NYSE:YELP). The social-media entertainment guide and review site has held up better since its early 2012 IPO than many of peers, but the company faces new challenges on the competitive front. Let’s take an early look at what’s been happening with Yelp over the past quarter and what we’re likely to see in its quarterly report on Wednesday.

Stats on Yelp

Analyst EPS Estimate ($0.04)
Year-Ago EPS ($0.06)
Revenue Estimate $40.3 million
Change From Year-Ago Revenue 62%
Earnings Beats in Past 3 Quarters (since going public) 2

Source: Yahoo! Finance.

Will Yelp get good reviews from Wall Street?
Analysts have reined in their views on Yelp slightly, now projecting slightly bigger losses for the quarter than it was a few months ago. The stock has been equally bouncy, having fallen more than 15% since the first of November but having regained much of the ground it lost following its previous earnings report.

Yelp has become the go-to place for reviews on restaurants, bars, and other local hangouts. Yelp takes the reviews that people voluntarily give it and uses them to draw more readers, while soliciting business accounts from the companies that get reviewed in exchange for enhanced profile pages and ad placements. Unlike AOL, Inc. (NYSE:AOL) and IAC/InterActiveCorp (NASDAQ:IACI), whose City Guide and CitySearch products relied largely on professional reviews, Yelp accentuates the social by relying almost exclusively on ordinary customers for their opinions.

But last month, Yelp just got a big wake-up call in the form of a challenge from Facebook Inc (NASDAQ:FB) , whose new Graph Search aims to take recommendations from Facebook users and make them available to others in their social networks. Facebook hopes that the resulting recommendations will be more valuable than Yelp’s because users will be connected to the people doing the reviewing, and Yelp’s plunge in response to the Facebook announcement suggests that investors are buying that argument.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.