Credit Suisse Says Yelp's Traffic Trends Need Further Monitoring

Stephen Ju of Credit Suisse on Friday commented in a note that shares of Yelp Inc (NASDAQ: YELP) will likely be pressured near-term following the company's fourth-quarter results.

"The disclosure of Local Advertising accounts versus prior ALBA which included deal customers serves to eliminate the churn-related overhang, but the sequential deterioration in its desktop and mobile traffic arises as another," Ju wrote. The analyst adds that while mobile appears to have resumed growth in January, it exerts downward pressure on Brand Advertising estimates.

Ju also notes that Yelp issued below-consensus EBITDA guidance although revenue forecasts were ahead of expectations.

Nevertheless, Ju maintains optimistic on shares of Yelp and recommends investors be buying on the pullback as the long-term investment thesis isn't impaired following the quarterly results.

Ju's estimates for the first quarter were tweaked slightly as the analyst now expects the company to report revenue of $116.1 million (versus prior $114.7 million) and EBITDA of $20.4 million (versus prior $21.5 million).

For the full year, the analyst expects the company to report revenue of $537.6 million (versus prior $511.5 million) and EBITDA of $102 million (versus prior $125.2 million).

Shares remain Outperform rated with a price target lowered to $71 from a previous $83.