Yelp has gotten torched over the last six months - since March 2026, its stock price has dropped 23% to $19.11 per share. This may have investors wondering how to approach the situation.
Is now the time to buy Yelp, or should you be careful about including it in your portfolio? Get the full stock story straight from our expert analysts, it’s free.
Why Is Yelp Not Exciting?
Despite the more favorable entry price, we’re cautious about Yelp. Here are three reasons why there are better opportunities than YELP, plus one stock we’d rather own.
1. Long-Term Revenue Growth Disappoints
Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last three years, Yelp grew its sales at a sluggish 5.1% compounded annual growth rate. This fell short of our benchmark for the consumer internet sector.
2. Projected Revenue Growth Shows Limited Upside
Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.
Over the next 12 months, sell-side analysts expect Yelp’s revenue to stall, a deceleration versus its 5.1% annualized growth for the past three years. This projection doesn’t excite us and implies its products and services will face some demand challenges.
3. Inefficient Marketing Strategy Eats Into Profits
Unlike enterprise software that’s typically sold by dedicated sales teams, consumer internet businesses like Yelp grow from a combination of product virality, paid advertisement, and incentives.
It’s relatively expensive for Yelp to acquire new users as the company has spent 46% of its gross profit on sales and marketing expenses over the last year. This inefficiency indicates that Yelp operates in a competitive market and must continue investing to maintain an acceptable growth trajectory. 
Final Judgment
Yelp isn’t a terrible business, but it doesn’t pass our bar. After the recent drawdown, the stock trades at 3.6× forward EV/EBITDA (or $19.11 per share). This valuation is reasonable, but the company’s shakier fundamentals present too much downside risk. We’re pretty confident there are more exciting stocks to buy at the moment. We’d recommend looking at one of our top digital advertising picks.
High-Quality Stocks for All Market Conditions
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
