Yelp is crashing after missing big on earnings and warning of slower growth ahead
- Yelp reported third-quarter results that missed Wall Street estimates.
- Full-year guidance was also short of the mark.
- Shares crashed more than 30% following the results.
- Watch Yelp trade live.
Yelp was crashing Friday morning, down more than 30%, after reporting third-quarter results and full-year guidance that was well short of expectations.
The review site said it earned $0.17 a share on net revenue of $241 million, missing the $0.36 and $245.5 million that analysts surveyed by Bloomberg were expecting."Although we achieved our adjusted EBITDA outlook for the third quarter, revenue was lower than we anticipated," Yelp co-founder and CEO Jeremy Stoppelman said in the press release.
"While the shift to non-term advertising has opened our sales funnel, it has also made our results more sensitive to short-term operational issues. We have begun to address a number of the issues that impacted our third quarter results; however, we expect them to affect our fourth quarter results as well, as reflected in our Business Outlook."
Yelp said it sees full-year revenue of between $938 million and $942 million, missing the Bloomberg consensus of $963 million by a wide margin.
But at least some Wall Street analysts remained optimitic following the disappointing quarter. A Jefferies team led by Brent Thill maintained its "buy" rating, but lowered its price target from $55 to $45 - 51% above where shares were trading ahead of Friday's opening bell.
"3Q exposed the near-term volatility around the shift to non-term contracts, with weaker than expected net new account adds centered around operational salesforce challenges," they said.
"While we view the ongoing transition as a work in progress (that will likely present headwinds), we are optimistic on the longterm outlook given improved focus on national and self-serve channels."Yelp shares were down about 29% this year, incliding the post-earnings plunge.