Yelp Inc. (YELP): A Cheap Internet Stock to Invest In Now

Yelp Inc. (YELP), the well-known local business review platform, has been facing challenges in maintaining growth and has seen its stock price stagnate in recent years. However, a closer look at the company's financial performance and competitive landscape reveals opportunities for investors.


Yelp's revenue growth trajectory has been uneven in recent years. In 2023, the company reported a new all-time high in business openings, signaling a post-COVID recovery. However, the COVID-19 pandemic had a significant impact on Yelp's financial performance, with revenue declining in 2020 due to reduced consumer activity. Since then, Yelp has recovered, with revenue growth of 12.03% in 2023 compared to the previous year.


Yelp's earnings and profit margins have also evolved over time. In 2023, earnings increased by 172.85% compared to the previous year, demonstrating the company's ability to bounce back from the pandemic's impact. However, profit margins have fluctuated, reflecting the challenges Yelp has faced in maintaining growth.

Yelp's competition with Google and other review platforms has impacted its user base and revenue growth. Google's dominance in search and recommendations has led to concerns about unfair business practices, with Yelp filing an antitrust lawsuit against Google in 2024. This regulatory and antitrust issue has played a role in Yelp's stagnant stock price, as investors await a resolution.


Despite these challenges, Yelp's advertising products and pricing strategies have contributed to its financial performance. The company offers free and paid advertising products to businesses, including cost-per-click advertising and multi-location Ad products. These products enable businesses to deliver targeted advertising to large audiences, driving revenue growth.

In conclusion, Yelp Inc. (YELP) presents an opportunity for investors seeking a cheap internet stock. While the company has faced challenges in maintaining growth and competition with Google, its financial performance has shown signs of recovery. As Yelp continues to innovate and adapt to the changing landscape, investors should consider the potential for long-term growth and value in this well-known local business review platform.