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YELP At P/E 272

Summary

YELP as of now is a 3.6 B$ company with 700M-800M revenue and recently cash flow positive.

YELP as of now is overvalued ?

 P/E of 272. This kind of evaluation either represents a bubble or a huge growth opportunity. I am not convinced as of now YELP has a huge growth opportunity and being a contrarian, I believe YELP is highly over valued waiting to be crashed.

I have gone through YELP's Investor presentation, I understand the logic of more the reviews merrier for YELP. Reviews are growing at 7M reviews per quarter, which is not an insane growth. Now that EAT24 is gone, yelp's primary revenue will be advertisement. Only supporting metrics for growth is businesses are repeating to buy advertisements.

Institutional ownership is very high at 91%. This is something to consider, I dont know the reason behind it. Or I am completely unaware of something that is happening YELP. I am yet to know how Nowait /turnstyle  will add to revenue/bottomline.

Google is pushing people to write reviews nowadays, each time I use google maps to restaurant ? It asking me questions like how was the food ? rate it ?etc etc. Subtle way of collecting information, this will be a threat to YELP. It will be now or sometime later. Already GOOGLE shows a graph of how rush a place will be at given time. GOOG already knows so much about location and individuals it is just a matter of time they will have similar information as YELP.

I am short on YELP. I am getting out of it soon as I see the momentum building. 

Disclosure: I am/we are short YELP.