Overall YELP gets a fundamental rating of 7 out of 10. We evaluated YELP against 70 industry peers in the Interactive Media & Services industry. YELP gets an excellent profitability rating and is at the same time showing great financial health properties. YELP scores decently on growth, while it is valued quite cheap. This could make an interesting combination. These ratings would make YELP suitable for value and quality investing!

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

YELP had positive earnings in the past year.
YELP had a positive operating cash flow in the past year.
Of the past 5 years YELP 4 years were profitable.
YELP had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

The Return On Assets of YELP (15.16%) is better than 85.71% of its industry peers.
YELP's Return On Equity of 20.46% is amongst the best of the industry. YELP outperforms 88.57% of its industry peers.
With an excellent Return On Invested Capital value of 20.29%, YELP belongs to the best of the industry, outperforming 85.71% of the companies in the same industry.
YELP had an Average Return On Invested Capital over the past 3 years of 11.39%. This is below the industry average of 13.70%.
The last Return On Invested Capital (20.29%) for YELP is above the 3 year average (11.39%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	15.16%
ROE	20.46%
ROIC	20.29%

ROA(3y)8.95%

ROA(5y)5.79%

ROE(3y)12.07%

ROE(5y)7.84%

ROIC(3y)11.39%

ROIC(5y)N/A

1.3 Margins

YELP has a better Profit Margin (10.23%) than 80.00% of its industry peers.
YELP's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 13.35%, YELP is doing good in the industry, outperforming 78.57% of the companies in the same industry.
YELP's Operating Margin has improved in the last couple of years.
YELP has a better Gross Margin (90.47%) than 91.43% of its industry peers.
YELP's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	13.35%
PM (TTM)	10.23%
GM	90.47%

OM growth 3Y54.25%

OM growth 5Y26.2%

PM growth 3Y34.72%

PM growth 5Y18.46%

GM growth 3Y-0.43%

GM growth 5Y-0.56%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so YELP is creating value.
Compared to 1 year ago, YELP has less shares outstanding
YELP has less shares outstanding than it did 5 years ago.
YELP has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.

2.2 Solvency

An Altman-Z score of 4.89 indicates that YELP is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 4.89, YELP is doing good in the industry, outperforming 78.57% of the companies in the same industry.
YELP has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.

		Industry Rank	Sector Rank
Debt/Equity	0
Debt/FCF	0
Altman-Z	4.89

ROIC/WACC2.29

WACC8.88%

2.3 Liquidity

A Current Ratio of 2.99 indicates that YELP has no problem at all paying its short term obligations.
YELP's Current ratio of 2.99 is fine compared to the rest of the industry. YELP outperforms 75.71% of its industry peers.
A Quick Ratio of 2.99 indicates that YELP has no problem at all paying its short term obligations.
YELP's Quick ratio of 2.99 is fine compared to the rest of the industry. YELP outperforms 75.71% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	2.99
Quick Ratio	2.99

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

YELP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 38.92%, which is quite impressive.
The Earnings Per Share has been growing by 24.97% on average over the past years. This is a very strong growth
YELP shows a small growth in Revenue. In the last year, the Revenue has grown by 5.35%.
Measured over the past years, YELP shows a small growth in Revenue. The Revenue has been growing by 6.84% on average per year.

EPS 1Y (TTM)38.92%

EPS 3Y56.59%

EPS 5Y24.97%

EPS Q2Q%8.93%

Revenue 1Y (TTM)5.35%

Revenue growth 3Y11.02%

Revenue growth 5Y6.84%

Sales Q2Q%4.36%

3.2 Future

YELP is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 26.76% yearly.
Based on estimates for the next years, YELP will show a small growth in Revenue. The Revenue will grow by 2.80% on average per year.

EPS Next Y15.74%

EPS Next 2Y24.15%

EPS Next 3Y20.96%

EPS Next 5Y26.76%

Revenue Next Year4.55%

Revenue Next 2Y3.68%

Revenue Next 3Y3.52%

Revenue Next 5Y2.8%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 12.19, YELP is valued correctly.
75.71% of the companies in the same industry are more expensive than YELP, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.21, YELP is valued rather cheaply.
With a Price/Forward Earnings ratio of 9.56, the valuation of YELP can be described as very reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of YELP indicates a rather cheap valuation: YELP is cheaper than 81.43% of the companies listed in the same industry.
YELP is valuated cheaply when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	12.19
Fwd PE	9.56

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, YELP is valued cheaper than 87.14% of the companies in the same industry.
95.71% of the companies in the same industry are more expensive than YELP, based on the Price/Free Cash Flow ratio.

		Industry Rank	Sector Rank
P/FCF	5.58
EV/EBITDA	5.59

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
YELP has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as YELP's earnings are expected to grow with 20.96% in the coming years.