Cantor Fitzgerald Is Watching This Metric At Yelp

Analysts at Cantor Fitzgerald on Monday provided a preview on Yelp Inc. (NYSE: YELP)'s earnings, scheduled for Thursday. The firm’s Youssef Squali, Kip Paulson and Naved Khan say they expect strong fourth-quarter 2014 results, “with local ad revenue powering ahead at an anticipated rate of 57% Y/Y.”

The report highlights: “The local online advertising opportunity remains substantial, and the number of players with scale, brand, network effect, and solid execution is very limited, positioning Yelp as a prime beneficiary both as an operator and as an acquisition target, in our view.”

Mobile usage and monetization will also remain key for growth, the analysts assure. “In 3Q:14, mobile remained strong, with uniques growing 46% Y/Y to 73M. Importantly, these mobile users tend to be the most active and engaged users/contributors on the platform.”

Cantor Fitzgerald expects fourth-quarter revenue and EBITDA of $108.2 million (+53.1 percent year-over-year) and $24.1 million (22.3 percent margin), respectively. These are practically in-line with consensus estimates (FactSet) at $108.4 million and $24.5 million, correspondingly, and also in-line with guidance of $107-108 million and $24-25 million.

Moreover, the report highlights that with limited exposure to foreign exchange fluctuations, guidance is likely in-line with consensus: “for 1Q:15, consensus estimates for revenue and EBITDA are $115.1M and $21.4M, respectively.”

The firm maintains a Buy rating and an $83 price target on the stock.

Image credit: Steven and Courtney Johnson, Flickr