YELP gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 70 industry peers in the Interactive Media & Services industry. YELP scores excellent points on both the profitability and health parts. This is a solid base for a good stock. YELP may be a bit undervalued, certainly considering the very reasonable score on growth This makes YELP very considerable 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.
In the past 5 years YELP always reported a positive cash flow from operatings.

1.2 Ratios

With an excellent Return On Assets value of 15.16%, YELP belongs to the best of the industry, outperforming 85.71% of the companies in the same industry.
Looking at the Return On Equity, with a value of 20.46%, YELP belongs to the top of the industry, outperforming 88.57% of the companies in the same industry.
The Return On Invested Capital of YELP (20.29%) is better than 85.71% of its industry peers.
The Average Return On Invested Capital over the past 3 years for YELP is below the industry average of 13.53%.
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

The Profit Margin of YELP (10.23%) is better than 80.00% of its industry peers.
In the last couple of years the Profit Margin of YELP has grown nicely.
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.
In the last couple of years the Operating Margin of YELP has grown nicely.
YELP has a better Gross Margin (90.47%) than 91.43% of its industry peers.
In the last couple of years the Gross Margin of YELP has remained more or less at the same level.

		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

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), YELP is creating value.
Compared to 1 year ago, YELP has less shares outstanding
Compared to 5 years ago, YELP has less shares outstanding
There is no outstanding debt for YELP. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.

2.2 Solvency

YELP has an Altman-Z score of 4.78. This indicates that YELP is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.78, YELP is in the better half of the industry, outperforming 80.00% 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	4.78

ROIC/WACC2.28

WACC8.9%

2.3 Liquidity

YELP has a Current Ratio of 2.99. This indicates that YELP is financially healthy and has no problem in meeting its short term obligations.
YELP has a Current ratio of 2.99. This is in the better half 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 has a Quick ratio of 2.99. This is in the better half 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

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 38.92% over the past year.
YELP shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 24.97% yearly.
The Revenue has been growing slightly by 5.35% in the past year.
The Revenue has been growing slightly by 6.84% on average over the past years.

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.
The Revenue is expected to grow by 2.80% on average over the next years.

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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 11.80, the valuation of YELP can be described as reasonable.
YELP's Price/Earnings ratio is a bit cheaper when compared to the industry. YELP is cheaper than 75.71% of the companies in the same industry.
When comparing the Price/Earnings ratio of YELP to the average of the S&P500 Index (28.30), we can say YELP is valued rather cheaply.
The Price/Forward Earnings ratio is 9.25, which indicates a very decent valuation of YELP.
81.43% of the companies in the same industry are more expensive than YELP, based on the Price/Forward Earnings ratio.
YELP is valuated cheaply when we compare the Price/Forward Earnings ratio to 25.57, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	11.8
Fwd PE	9.25

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of YELP indicates a rather cheap valuation: YELP is cheaper than 87.14% of the companies listed in the same industry.
YELP's Price/Free Cash Flow ratio is rather cheap when compared to the industry. YELP is cheaper than 95.71% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	5.41
EV/EBITDA	5.38

4.3 Compensation for Growth

YELP's 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.