YELP Should I Buy
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Yelp Inc. is not a strong buy at the moment for a beginner investor with a long-term strategy. The stock is facing macroeconomic pressures, declining user engagement, and weak financial performance. Additionally, the lack of significant positive catalysts, bearish technical indicators, and cautious sentiment from analysts suggest that it is better to hold off on investing in this stock right now.
The technical indicators for Yelp are bearish. The MACD histogram is negative and contracting, RSI is neutral at 31.982, and moving averages show a bearish trend (SMA_200 > SMA_20 > SMA_5). Key support is at 20.337, with resistance at 24.268. The stock is trading below its pivot point of 22.303, indicating downward pressure.
The company reported record revenue of $1.46 billion in 2025 and announced plans for AI initiatives to drive future growth.
Weak guidance for 2026 projects flat sales growth. CEO Jeremy Stoppelman sold 66,200 shares, signaling a cautious outlook. Analysts have lowered price targets, citing declining user engagement, macroeconomic pressures, and risks from AI disruption. Hedge funds and insiders show no significant trading trends, and the options market sentiment is bearish.
In Q4 2025, revenue dropped by 0.54% YoY to $359.99 million, and net income decreased by 10.48% YoY to $37.8 million. EPS remained flat at 0.61 YoY, while gross margin declined to 86.42%, down 1.36% YoY. These metrics indicate weakening financial performance.
Analysts have a neutral to bearish stance on Yelp. JPMorgan, Baird, and BofA have all lowered their price targets, citing weak guidance, macro pressures, and risks from AI disruption. Jefferies raised its price target slightly but maintained a Hold rating, reflecting cautious optimism.
