Yelp stock dropped 11% in a year, but advertising division shows growth potential.

From Nasdaq: 2025-03-07 09:02:00

Yelp (YELP) shares have dropped by 11% in the past year, underperforming the Computer and Technology sector and the Internet – Content industry. This decline is attributed to challenges in its Restaurant, Retail, and Other segment, with revenues decreasing by 3% in Q4 2024 to $470 million.

Yelp heavily relies on advertising revenues, with over 95% of its total revenues coming from this source. Despite facing competition from Google, Microsoft, and Meta, Yelp has managed to achieve growth in its advertising services division, with a 10.8% increase in advertising revenues in 2024.

Yelp’s shift towards selling advertising plans without fixed durations has led to a rise in paying advertiser accounts and strong retention rates. The company’s investments in artificial intelligence and machine learning have also improved ad clicks and decreased average CPC, enhancing the user experience and driving revenue growth.

For 2025, Yelp anticipates revenues between $1.47 billion and $1.485 billion, with expected year-over-year growth of 5%. Despite challenges, investors are advised to hold onto Yelp stock as the company’s advertising services division continues to show growth potential.



Read more at Nasdaq: Should You Hold on to YELP Stock Despite Its 11% Dip in a Year?