A strong full-year outlook and healthy advertiser growth is overshadowing more subdued Q2 guidance and concerns about still-heavy sales/marketing spend growth - Yelp's focus on local advertisers translates into relatively low spending per account. The fact shares went into earnings down 43% from their high also doesn't hurt.
"The Market may not want to pay up for quality growth now, but we believe it almost inevitably will again," writes RBC's Mark Mahaney, upping shares to Outperform. He thinks the local reviews leader ($4.4B market cap) would be "a logical fit" for at least a half-dozen Internet companies.
Piper's Gene Muster cites a lower valuation and solid fundamentals as reasons for upgrading to Overweight. Shares still go for ~8x 2015E sales.
On the CC (transcript), CEO Jeremy Stoppelman mentioned international traffic grew 95% Y/Y and now makes up 23% of total traffic, albeit just 3% of revenue. He also claimed Yelp's new Call to Action feature is creating 100K advertiser leads/week.
CFO Robert Krolik promised operating leverage would improve as 2014 progresses, in spite of Yelp's heavy spending. He added Yelp's expectations for its new YP partnership are "fairly modest," and that the deal hasn't been factored into guidance.