VIEW ONLINE Yelp is crashing after missing big on earnings and warning of slower growth ahead
- Yelp reported third-quarter results on Friday 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 were well short of expectations.
The reviews 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's cofounder and CEO, Jeremy Stoppelman, said in a 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," he said. "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 expected full-year revenue of $938 million to $942 million, missing the Bloomberg consensus of $963 million by a wide margin.
But at least some Wall Street analysts remained optimistic following the disappointing quarter. A Jefferies team led by Brent Thill maintained its "buy" rating but lowered its price target to $45 from $55 — still 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 have fallen about 29% this year including the postearnings plunge.
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