Amid rampant market volatility, tech giant Amazon (AMZN) has lost more than 20% in the past month. Additionally, analysts are pessimistic about its EPS growth. However, quality internet stock Yelp (YELP) has outperformed AMZN over the past month and posted record earnings in its latest quarter. Therefore, instead of AMZN, investors might consider buying YELP this fall. Let’s find out….
Amid the Fed’s aggressive rate hikes, internet stocks have seen a substantial decline in investor attention, as evidenced by First Trust DJ Internet Index ETFs (FDN) Lost 7.8% in the past month and down 47.5% since the start of the year.
E-commerce and technology giant Amazon.com, Inc. (AMZN) has lost 22.9% in the past month and 46.4% since the start of the year. Additionally, the company released mixed financials in its most recent quarter. For the third quarter ended September 30, 2022, AMZN’s total net sales were $127.10 billion, up 14.7% year-over-year.
However, its net income fell 9% year-over-year to $2.87 billion, while its EPS came in at $0.28, down 9.7% from a year earlier. year to year. Additionally, analysts expect AMZN’s EPS to fall 85.6% year-over-year to $0.20 for the quarter ending December 2022 and 102.8% d year-over-year to negative $0.09 in 2022.
Therefore, investors might consider quality internet stocks, Yelp Inc. (YAP) In place. YELP operates a platform connecting consumers to local businesses in the United States and abroad.
On November 3, 2022, Jeremy Stoppelman, co-founder and CEO of YELP said, “As our teams consistently execute on our strategic initiatives, I remain confident in our ability to drive profitable growth and shareholder value on the market. long term.
YELP has lost 7.9% over the past year to close the last trading session at $36.34. However, the stock has gained 6.2% over the past month and 10.9% over the past three months.
Here’s what could shape YELP’s performance in the near term:
Save financial statements
On November 3, 2022, Jeremy Stoppelman, co-founder and CEO of YELP, said, “We achieved record net revenue, driven by record revenues in our service categories and in our over-the-counter channels. most efficient service and multi-site.
YELP’s net revenue increased 14.8% year-over-year to $308.89 million for the third quarter ended September 30, 2022. Its advertising revenue was $293.66 million. dollars, up 14.3% year-over-year. Also, its adjusted EBITDA was $73.94 million, up 4.6% year-over-year.
Favorable analyst expectations
Analysts expect YELP’s revenue to grow 16% year-over-year to $1.20 billion in 2022. Its revenue is expected to grow 10.1% year-over-year. another to reach $1.32 billion in 2023.
Additionally, its EPS is expected to grow 34% year-over-year to $0.67 in 2022 and 94% year-over-year to $1.30 in 2023. The stock topped EPS estimates in three of the four consecutive quarters.
POWR ratings reflect promising outlook
YELP has an overall rating of B, which is equivalent to a buy in our own POWR Rankings system. POWR ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock has an A rating for quality. This is justified by its gross profit margin of 91.45% over the last 12 months, which is 81.7% more than the industry average of 50.32%.
Also, it has a C rating for stability, in sync with its 24-month beta of 1.16.
In stock 61 the Internet industry, YELP is ranked #2.
Click on here for additional POWR ratings for YELP (Growth, Value, Momentum and Sentiment).
See All Top Internet Industry Stocks here.
Despite widespread macroeconomic headwinds, YELP posted record third-quarter earnings. In addition, the company’s turnover is expected to increase significantly in the current year. Given the stock’s promising outlook, investors might consider buying YELP instead of AMZN this fall.
How it works Does Yelp Inc. (YELP) compare to its peers?
While YELP has an overall POWR rating of B, one might consider looking at industry peers Expedia Group, Inc. (EXPE), Travel Zoo (TZOO) and trivago NV (TRVG), which also have an overall rating of B (buy).
YELP shares fell $2.84 (-7.82%) in premarket trading on Friday. Year-to-date, YELP is down -7.56%, compared to a -19.95% rise in the benchmark S&P 500 over the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master’s degree in economics, she helps investors make informed investment decisions with her insightful commentary.
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